Introduction

The most challenging aspect of running a Professional Services Operation (PSO) is managing the utilization of people.  While there are many important aspects of managing a PSO, managing utilization of human capital is fundamental to making a profit.  Unfortunately the majority of PSO’s in the market today do not achieve their full potential when it comes to fully utilizing human capital.

Very few firms have comprehensive and documented processes for how they manage resources and achieve a desired level of utilization.  They have utilization measures (sometimes), utilization targets, time recording procedures, project tracking mechanisms, and more.  However, what is not seen often is a well thought-out process for ensuring that billable utilization is high and stays that way, every day, week after week, month after month. 
This paper is dedicated to those that need/want some simple and actionable ideas on how to effectively manage to achieve high utilization.

10 Hottest Tips

1. Adopt a utilization metric that’s easy to understand - Having utilization metric is a good thing.  Having one that everyone understands is better.  Too many firms allow different formulas for utilization to proliferate around the enterprise.  As a result, confusion sets in and inevitably the lack of a common taxonomy for utilization results in unnatural pressures being applied internally. Doubt is often cast on the PSO team to manage the business efficiently, all because there was a lack of understanding relative to what was being measured, and what result was expected. The simplest (and most commonly used) formula for utilization is #billable hours/available hours with 2080 being the standard for available hours.  Some key points to remember:
   • You can set the available hours number at whatever you like - as long as you are consistent
   • If you pick 2080 hours, you are saying:  The Consultant will take training, vacation, and sick time throughout the year.  But, the Consultant should hit this overall utilization target.
   • If you pick less than 2080 hours, you are saying:  We are backing out time for training, vacation, sick time from the denominator. But, the Consultant should then maximize the productivity of the remaining hours.

2. Get the forecast right - Having a view into the future is essential to resource planning.  Technology companies are usually pretty good at forecasting product demand.  They expend time on process and software applications to assist with the task.  Unfortunately, most are not so good at forecasting services often leaving the task to the PSO leadership to figure out.  Without a good services forecast, it’s difficult to manage utilization well. 
   The forecasting process, irrespective of a companies’ organizational construct, must facilitate the most precise estimate of need, by person and skill, by month, to span the necessary hiring horizon. Normally some ‘what if”
   methodology is used to provide sensitivity analysis to your projections and ultimately a capacity resource plan to guide your investment decisions.  Effective interlock of the resource management team and sales is imperative for effective forecasting and capacity planning.

3. See #2 and then plan on being wrong - We find most companies have room for improvement in this area.  How can you plan when you have no view of what future needs will be?  Because a forecast is just that - a forecast - you can count on it being wrong.  The key is to gain some control and consistency over how wrong (or accurate) you will be.  Sales should have a metric that is tracked to ensure they focus on the services forecast, as should the PSO.  No matter what the volatility of your business, we have not yet observed a company that cannot improve on their forecast accuracy using better risk based planning.

4. For resource planning one pool will do - The bane of PSO’s is where resources are ‘owned’ by multiple departments creating silo’s of resources.  Unfortunately the silo mentality is alive and well in corporations all over the world.  The best medicine for this problem is for the company to begin to manage resources in a centralized way.  Resources are and should be assets of the corporation, not a particular department.  Department management relationships should be maintained to help manage employee development, goal setting, reviews, etc.  The Resource Management Office concept, pioneered by RTM Consulting, provides a process based approach to helping companies make deployment decisions centrally while managing employee careers locally.

5. Let the computer do the heavy lifting - Today’s Professional Services Automation (PSA) tools can do a big part of the job of analyzing resource needs and help with making staffing assignments leaving managers more time to manage.  Surprisingly, some PS firms today manage their resource pool either without the help of automation or with simple tools generally not up to the task of today’s business needs.

   Considering the impact of just a few points of utilization of a typical labor pool, justification of investment to automate this important task is usually easy.  Are you trying to manage a large and growing workforce with a spreadsheet?  Resource management software (also commonly part of or referred to as PSA software) exists to create a data base of resource pool information, enter and track project needs and progress, and produce reports/queries capable of reducing determination of project staffing needs by up to 90% (a human element is still needed to finalize resource selections). 

6. Manage resources, not people - Don’t let your PSO be hobbled by sales people who may insist on a particular person to do a job.  Your job as the PSO leader is to complete a project on-time, on-budget.  Who does the work is irrelevant.  Breaking the organization of the “I want my favorite person” syndrome is critical to improving utilization.

7. Watch the non-billable time buckets carefully - It’s too easy to hide idle time unless you make the process of time recording and reporting transparent in the organization.  Regular analysis of this information is vital to making necessary adjustments when problems develop.  Avoid using non-productive time recording codes such as ‘other’.  Additionally, these codes should be managed centrally and require the approval of the PSO leader to establish new codes.

8. Higher labor cost is better than bench time - Don’t let overzealous desires to take advantage of offshore labor rates get in the way of using higher cost labor that may be sitting on the bench. 
   The art to staffing a project is to find the right balance of cost, skills and project management.  Sometimes resource availability will dictate use of a labor from higher cost pools than desired, or vice versa.  Re-balancing the base of skills is a constant exercise requiring continuous discipline and process improvement.  Making these choices requires that the PS organization look at its gross margin performance over a range of projects to accommodate these inevitable resource imbalances.  Simply put, no two identical projects will produce the same profit, but on the average achievement of a target gross margin should/can be the desired outcome.

9. Never employ enough resource to meet demand - Did I just read that right?  Yes.  Figure out what your steady state resource needs are (every business has at some level a steady state), and use partners/contractors to fill peak-load needs.  Note the white line (approximate steady state) in the chart below.  At some point it makes sense to fill peak-load demand with partners or contractors so that excess costs can be shed quickly when demand slackens.  While the cost of a contractor may be greater than an employee, avoiding idle time, hiring training and attrition costs, and impacts on morale from layoffs all offset the temporary spike in per headcount labor.

   

10. Consultants should own the utilization metric - In my view, management always benefits from driving accountability to the lowest level possible in their operations.  Period.  Key benefits of consultants owning the utilization metric:
    • Encourages the consultant to up-sell
    • Captures the collective input of the team for solving utilization issues
    • Creates incentives for continuous skills development

Summary

As stated earlier, while there are many important aspects of managing a PSO, managing utilization is fundamental to making a profit.  Companies invest lots of energy and time into processes to address many aspects of their businesses, but resource management has long been lacking in discipline for many PSO’s.  Using the ‘10 Hottest Tips’ will help you get on the road to sustainably high utilization.

About the Author

Randy Mysliviec is CEO of RTM Consulting, the market leader in resource management and PS business optimization services.  Comments and feedback are welcome at info@rtmconsulting.net .

In today’s economic situation, much has been made about the need to automate business processes to cut overhead costs and accelerate services to the marketplace.  This can prove difficult for any organization due to a variety of mitigating factors including cash flow issues, executive support, and unexpected variations to your project plan.  These issues manifest themselves exponentially when dealing with enterprise, multi-national corporations. 

This need for automation is more important than ever.  Over the past generation, we have seen a transformation in the value drivers of the world economy.  Major companies have moved from focusing on higher product margins to driving increased margins and competitive differentiation through the use of “value added” services.  This move has been highlighted in IBM’s transformation from a product to services company and has been attempted and considered by an enormous variety of enterprises large and small.

With this shift in the world economy comes a need for a shift in the type of systems and processes that will drive business success.  This article seeks to outline some of the keys to consider in beginning the journey to automate the global services delivery chain.  It requires not only new partnerships, processes and an open mind but also company wide dedication to achieve success.

With operations across the map, global business automation is a high risk, high reward proposition.  However, by understanding and implementing the following success factors, you can greatly increase not only the speed and efficiency of your initiative but also its return on investment (ROI).

1) Define a Clear Vision and Strategy

Know where you are going!  It is much easier to reach your ultimate goal when you actually have an ultimate goal.  Take the time from the beginning to lay out the manual processes that must be automated immediately and those that can wait.  It’s easy to be distracted by secondary priorities, so create a ‘parking lot’ to ensure that mission critical tasks are completed on schedule. Focus on the ‘must have’ objectives and park all other requests until you have fulfilled the top priorities.  By detailing a clear vision and strategy, the key decision makers will be on the same page with a common end result in mind.

2) Ensure IT is a Strategic Partner

It is highly likely that your automation initiative will involve the implementation of new tools such as a Professional Services Automation solution (PSA) as well as integration with existing business solutions.  If this is the case, clear communication between business executives and your IT department is essential.  It is no secret that these two groups often have different objectives and needs so strive for open dialogue to clearly explain the greater corporate goal.  With everyone in the organization on the same page, you will hit your milestones on time and on budget.

Clear communication with the IT department will also help to make clear that they are strategic partners in the effort to improve services delivery.  With the advent of Software-as-a-Service (SaaS) solutions, IT’s role has moved to a new strategic level.  Line of business executives can “try and buy” solutions and IT can play an invaluable role in helping integrate new solutions into the overall enterprise footprint.  This is an unprecedented time of change and growth in the ability of software to solve business needs and IT can be a key part of that solution.

3) Earn Executive Backing

Without corporate support on various levels, your automation initiative will never get off the ground running.  However, by gaining executive sponsorship, you will maximize your success and return on investment. 

Funding

Although automation of your services delivery will in time prove cost effective, it will require upfront costs.  Now more than ever, the ability to clearly and concisely state the short and long term benefits to justify these costs will make or break your cause.  Executives are metric driven individuals and a lack of concrete ROI figures will scuttle your initiative immediately.  However, prove the business value of these costs and even the most conservative executives will have difficultly ignoring you.

Motivation

Automation of your global services delivery will require cooperation from every department.  Due to complication, inconsistency, or a lack of scalability, current business processes will need to be replaced or retooled.  You will need executive level support to get everyone in the organization behind your initiative.  An automation tool is only as good as the manner in which it is used.  C-Level motivation across your organization will drive user adoption and help ensure the viability of your initiative.

Expectations

So your executive team has given the green light for the purchase of a services automation tool.  Now show them results.  A concrete and rapid return on investment is the quickest way to ensure the success of your implementation.  Clearly illustrating profit margin, reductions in overhead costs, and increased revenue will create a thirst for metrics that will keep your executives engaged and satisfied.

4) Process Alignment

As I stated earlier, global business automation is a high risk, high reward proposition.  It is a coordinated dance across regions, roles, and zones.  Furthermore, services delivery is an increasingly integrated chain of processes that are intertwined and interrelated.  If implementing services automation software, it is essential to leverage the vendor’s consulting capabilities.  They have an intimate knowledge of their software capabilities and have refined common processes to handle implementations of any size.  For example, without proper consulting and strategy sessions, time and expense tracking may be scheduled to come online before projects are even set up in the system to track time and expense against.  You will save time, money, and energy by taking the time to align your processes in a manner that allows for coordinated implementation across departments and geographical locations.

Another key example of this relates to achieving appropriate business definitions.  We take for granted in the manufacturing world a level of granularity to describe processes and parts that simply does not exist in the services world.  Resolving questions around such items as how to define utilization, work schedules, standard rates and other items are always herder than they first appear.  Typically, it is not because these concepts don’t exist in the enterprise, but rather because they exist in so many different forms in the enterprise.  Particularly, as enterprises have grown by acquisition, you will find that the exercise in defining and clarifying these definitions will be some of the most valuable - and most painful - work that can be done.

5) Project Execution

The worst thing you can do after your plan is set is to deviate from it.  Stick to your established milestones and stay focused on your end goal.  Active involvement with a select group of capable and credible internal resources provides the best avenue for success.  However, too many voices will impede the process. Less is more when it comes to deployments and having a centralized decision making body will pay dividends.  Also, ensure that middle managers are involved during testing and training since they will most fully utilize the system.  Finally, constant alignment between zones will help ensure that your automation initiative is coordinated and finishes on schedule.

Conclusion

It is very difficult to make a case for a global overhaul of your services delivery in today’s economy.  However, automation of your core business processes will streamline your time to marketplace and eliminate revenue draining manual processes.  Although every services business is different on a variety of levels, the above critical success factors provide a general plan that will guide you on the right path to success for the automation of your global services delivery. 

About OpenAir

OpenAir is the world’s leading provider of Software-as-a-Service (SaaS) project management software. Offering both Professional Services Automation (PSA) and Project Portfolio Management (PPM) solutions, OpenAir provides project-based organizations and firms the tools they need to grow their businesses quickly and profitably. Providing enterprise-level functionality for businesses of all sizes, OpenAir has more than 45,000 active users across 350 world class firms utilizing the software to better capture billable time, manage projects and resources and bill customers. Coupled with a team of highly experienced consultants from some of the world’s leading services firms, OpenAir PSA and OpenAir PPM drive higher profits through improved utilization, visibility and data collection. To learn more or schedule a demo, please visit http://www.openair.com.

I’m not sure anyone ever said ‘when I grow-up, I want to be a project manager’.  It’s the type of job that is critical in many companies but not one that necessarily is anyone’s dream job out of school.  Part of this may be due to the fact that becoming a project manager is not a book-learned skill but an investment of time and gaining of experience that defines and hones the basic skill set required to do project management.

In general a project manager must have the 3 ‘tions’ to be successful:  Communication, coordination, and organization.  I find that in many cases these are personality traits just as much as learned items.  Your project managers will stand out as technical leads or project leads simply due to their ability to keep on top of things and keep their respective team members in sync.

The 3 ‘tions’ are the starting point to the project management cultivation cycle.  The project manager cultivation cycle is made up of three stages:  Learned Techniques, Role playing , and Experience. Each stage is a progression in the level of your project management skills.

Learned techniques covers those items that you can pick up from reading books, taking project management courses, and attending seminars.  In this stage your project managers are introduced to tools of the trade including project plans, budget management, issue tracking, status reporting, and so forth.  The execution of these learned techniques, however, is what makes an effective project manager.  A project manager needs to know when to reach out, when to escalate, when to let others take the lead, and how to keep the entire team in sync.  By combining the 3 “tions’ and learned techniques, the beginnings of a great project manager are seen.  Unfortunately some project managers will stop here which limits their ability to take on challenging projects or expand into a mentoring role for other project managers.

The Role Playing stage is one that typically is covered as Project Managers rise through the ranks.  The best project managers are ones that have performed many of the roles of the project team and so have a basic knowledge of what the role entails.  What this means is that your project managers usually have a technical or industry background in the types of projects that are being managed.  I started my career as a software programmer and eventually started managing software development projects.  I would always have the ability to apply my ‘role-based’ knowledge to team discussions to resolve issues, revise timelines, and insert contingencies and dependencies based on my experience in those roles.  If you step into a project manager role in an unfamiliar industry or technology, you tend to revert back to the learned techniques stage until you gain role based knowledge.

The last stage is experience. There really is no substitute for this phase.  Project managers gain knowledge and skills by simply dealing with what comes their way each day on a project.  This knowledge cannot be taught by courses.  Many people would call this Intuition.  It’s a skill like anything else but it’s a skill that comes with time.  Once a project manager reaches this stage they never leave since learning is a continuous activity.  Instead they evolve into a mentoring role to those up and coming project managers that are just starting the cultivation cycle. 

After years of attempting to build practice areas in my consulting organizations, I have come to the point of being able to present to others some of the things that have worked.  In this article I will discuss ten of my lessons learned.

To begin, let’s establish with what I am referring to in the term “Practices”.  I use the term of a Practice as a focused effort on a particular Discipline.  Disciplines range from IT aspects, such as software development components, (i.e., Java, SOA, or EDI), to broader spectrums like Project Management, Quality Management or Process Improvement.  Disciplines also are constructed around a service or product offering.  Examples here might be off shoring, SAP, education at high schools, or healthcare.

The key is that you can assume that every consulting organization has at least one Discipline from which they sell and specialize.  These Disciplines might have an open repository of collateral and marketing materials, but a Practice takes this one step further with a level of focus on the development and evolvement of a Discipline.

Let’s first start by saying that nothing is more important to understand that while developing your Practices you are going to need some patience.  Wait.... I am getting ahead of myself.

The Value of Practices

If you don’t currently have a program of Practices in place today let me give you a couple of reasons why I believe that it makes since to start the process. 
You have spent years developing resources in your organization with qualities you desire and have made heavy investment in their skills.  Every time someone leaves, you take a skills hit.  One of the reasons why people leave an organization is because they no longer feel that they are acquiring new skills or are participating in activities that do not lead to personal growth.  Practices allow an organization a method of keeping skills fresh with persistent and active learning.  In addition, an offshoot of a good Practice is the internal development of management talent to those wishing to take steps in that direction. 

The advantages to the organization are more visible.  Practices build and capture collateral, and are used to build or extend service offerings and marketing endeavors.  In addition, a Practice can become the organization’s quality control agent and provide consistency in the delivery of its services.

All these values start to pay real dividends when your organization even begins to exhibit the perception that you are skilled and knowledgeable in your Practice areas.  Being able to market and demonstrate your commitment to a Practice is something that your current and future clients will both value.

The Starting Point

So let’s say that you are at the point of having a few technical Disciplines and a couple of solution Disciplines in your organization.  Everyone is eager to begin a stronger focus on these and you want to start developing them into Practices.  Stop.  Here is Lesson #1:  Start with only one or two key Discplines. Practices are a dedicated and focused effort.  How many of these can you really put on your organization’s plate?  You are better off selecting one or two Disciplines and getting them up and running successfully before swinging the doors wide open.

Which Disciplines should be the first to migrate into Practices?  The answer lies in the answer to the questions, “What do I want to sell more of?” and “What are most of my people skilled at doing?”.  Between the answers to these questions you should be able to prioritize your Discipline to Practice roadmap.

Management Investment

It is easy to say that management must be committed to the building of Practices, but it is going to take more than words to make a Practice successful. Lesson #2:  You need to understand that management is going to have to make an investment. This investment constitutes both an aspect of time and of money if you really want this to work.

You want a Practice because it allows you to better position yourself in the marketplace and helps you develop specific service offerings.  Why would you ever want this to occur without your management involved in steering the ship?  Management must be involved in the Practices.  Now I am not saying that you need to be in every Practice related phone call or meeting.  Remember, this is a good place to mentor and develop management skills in others.  Keep this as your objective of involvement within the day to day development of a Practice.  Where you really want to be more involved is in the direction setting and prioritization of activities within the Practice.  We will continue on with the understanding of the management investment, but here is Lesson #3:  Manage your Practices. What I think works the best is to have your Practice leaders meet periodically with the organization’s management and marketing leaders.  This is the best place to develop the roadmaps used within your Practices and to collaborate on the activities across your Practices.

Practice Leadership

So, who should be in a Practice and how should it be led?  This is where a few of my lessons have been learned through some pain. Lesson #4:  A Practice must have a lead driver. I use the term of a lead driver because in most cases many consulting organizations do not have the ability to have a senior individual who is solely responsible for the development of a Practice.  Larger organizations might be able to support a full time Practice Manager role that is focused on the development of the Practice, but in most cases these individuals are directed towards being the billable leader within deployments.

This brings us back to the investment that management needs to be willing to make.  The best person to get a Practice off the ground is the same person that everyone else goes to when they have a question within that Discipline.  This is in many cases the same person that you can bill most often and at the highest rate.  My suggestion is to begin a program where these individuals bill 30-32 hours a week in lieu of the typical 40.  In order to do this you have to establish this expectation upfront with both your sales team and your clients.

These newly freed hours are used to “drive” the Practice by working with management in setting direction, organization and communication within the Practice, and collateral development.  Done correctly, the benefits equated with the loss of revenue should be minor to the advantages.

The Practice Team

At this point, we have management commitment and someone to pilot our Practice plane.  If you stop there and think that our Practice will organically grow, you are doomed to failure.  This brings us to Lesson #5:  Avoid having a strict Practice structure. While the best Practice structure includes having your lead available for 8-10 hours a week, things happen.  You might be required to use this resource on a project full time for a month.  Or, the resource might leave your organization.  When these things occur you get a Practice that is on again, off again, and momentum is never developed.  Make sure that a Practice Lead finds and develops others to hand over the controls to for these periods.  This will ensure that activities like Practice meetings and communications are not hindered when the Lead is not available.

Who should you include in your Practice?  This is Lesson #6:  Keep your Practices open to everyone in the organization. It is a mistake to start a Practice with only those skilled in that discipline.  What I found is that people want to extend themselves to areas that are an interest to them, and felt slighted that they weren’t included.  Once Practices were stated to be open to anyone having interest, they also benefitted by the exchange of ideas between various Disciplines.

Collateral Development

All organizations have some level of focus on developing and reuse of corporate collateral.  In order to promote this attitude, I found Lesson #7:  Compensate for collateral development. I am not sure that one method is better than another; however I would review it on a quarterly base and make sure you get the Practice Leads involved.  I also believe that having the Leads receive a small stipend for their participation in the role to be beneficial as well.  You could do this in addition to the collateral bonus or just the one Lead bonus if you wish.

Remember that we don’t wish to stymie the development of any collateral, whether it is from a Discipline or a Practice.  So, reward for anything that adds to the organization’s IP.

While we are all developing this collateral, let’s add Lesson #8:  Keep marketing in sync. I’ve witnessed consulting organizations where the Marketing team determines the service offerings and assigns collateral development to the consulting organization.  To me, this is backwards.  Let the people who live that discipline shape your direction, then let the marketing team work on the best way to present and bring these ideas to bear.  This happens once the marketing team members and Practice management begin working hand in hand.  Every couple of weeks I would have a “Service-focused Leadership” meeting where the executive team, marketing, and the Practice Leads worked on development of new offerings and the building of marketing plans.

The Practice Reach

If you stop at the development of collateral as your delivery from a Practice, you are missing out on a great opportunity for the continuous improvement of your organization.  This is Lesson #9:  Have Practices involved in the delivery of your services.

Your Practices should be involved in at least the review of your SOWs and proposals.  Practices should also be very much involved in quality and consistence checks within your delivery methodology.  This reach of your Practices helps ensure that skills development and the implementation of best practices are active in your organization.  What this does for your culture and belief in team work for both new and existing members of the organization is wonderful as well.

And Finally

There is one last lesson to be discussed.  As mentioned at the beginning of this article, you need to go into this with an understanding of patience.  To me, this was probably the hardest to accept.  Lesson #10:  In development of a Practice, you will need patience. Change takes time.  It doesn’t make much of a difference whether the organization is small or larger.  Getting a Practice established takes a commitment to see things through.  You need to be prepared for a decent amount of coaching and time to show that these new changes are important to the organization.  But once they get going and develop a life of their own, you will be glad that you did, and will benefit from the effort.

Software as a service (SaaS) products have many advantages over enterprise software. With no hardware and software to deploy, SaaS customers benefit from lower start up costs and a lower total cost of ownership (TCO). Additionally, all customers benefit equally from software upgrades and improvements - not just those considered “strategic” or with fat wallets. Yet, many companies fail to realize the benefits they expect (and were sold) from the product. Why is that?

From a corporate perspective, many SaaS products are sold as part of a “subscription” model, which provides much more predictability in bookings, revenue, and cash targets. Still, many SaaS companies have examples of customers not really using what they paid for or not renewing their contracts. Again.... why do you think that is?

Many businesses have a misconception that if it is SaaS, it is also 100% self-service (or close to it, anyway). While that is definitely true in many cases and to some degree, it is not entirely the case. On-demand businesses that provide primarily transactional software may, in fact, be more self-service “out-of-the-box” than those whose products and services are more transformational in nature.

So what is transactional versus transformational, and how does each affect the go-to market strategy for a Professional Services Organization (PSO) in a SaaS business. Let’s explore two different SaaS businesses and the role the PSO plays, WebEx and Salesforce.com, to answer that question.

WebEx
WebEx (now part of Cisco) professes to be the “#1, on demand collaboration platform” for online meetings and training. Let’s focus on the “on demand” component.

“On demand” is another way of saying, SaaS. A WebEx customer can quickly and easily get started with WebEx for as little as $39/month for an annual agreement, and there is “no software to download and install” and “no technical expertise needed.” It’s very transactional: I need to host a meeting with my counterparts in another region. WebEx does not transform a business; rather, it allows businesses to conduct meetings (transact) in a less costly and time consuming way. Can anyone imagine what a PSO’s role would be at a transactional company like WebEx? The product is so easy to use. Anyone? Well, I’ll tell you....

Salesforce.com
Salesforce.com is a much more complex application than WebEx. Any experienced sales person knows how to manage contacts, opportunities, forecasts, and pipelines (we hope). However, by using Salesforce.com, businesses can fundamentally change how they approach the selling process by providing it with better insights and knowledge into its customers, prospects, and sales and marketing efforts. With better access to data, sales managers can assist their teams in managing their business by chasing the best opportunities and enlisting the help of others in the organization to close deals. Senior management can more closely track sales progress in a given period and predict results. As with any tool, though, the ability for a company to do all of those things is dependent on the use of the tool, not necessarily the tool itself. If not used properly, it can become a cumbersome tool with incomplete and unreliable data.

So what role does Salesforce.com’s PSO play in this transformational business? As teams grow, information sharing and cross departmental metrics become increasingly more important - and difficult to get.

Salesforce.com’s PSO provides strategic consulting in the areas of CRM guidance, methodology definition, and best practices (transformational services), but since Salesforce.com is highly customizable, the PSO also provides implementation services (transactional services). Let’s face it, too, the data captured by Salesforce.com can be very complex, so the PSO provides data management and integration services (hmm…could this be both transformational and transactional?).

So is Salesforce.com really “self service?” Well, of course ....  if you have the time, knowledge, and expertise to set goals, define a proper methodology, implement the solution, train your team, and use the data properly. If you can’t do all of these things, you won’t get the value you hoped. Professional Services to the rescue!

Conclusion
In my experience, many SaaS companies do a great job of creating self-service tools and delivering them as an on-demand application. The training is straight forward, and learning how to point and click throughout the application is relatively easy.

WebEx has a team called Assist Services. Assist Services provides customers with dedicated technical support before, during, and after the WebEx meeting. For a little more investment, Assist Service will produce a recording of the meeting without all the “pre-and post-session footage.” They can also conduct dry-runs with the meeting host to be sure the meeting goes off without a hitch. So even something as straight forward and self-service as starting and running an online meeting may require some support along the way. Again, though, the products and services WebEx provides are not transforming the way Company XYZ does business. (WebEx charges $495/hour for their ala cart Assist Services, btw.)

The hard part, though, is not the pointing and the clicking. It isn’t the technical implementation, either. Rather, where users of SaaS products get stuck, and the area where a PSO can contribute the most value to customers and the company overall, is in defining a proper methodology for using the tool to ensure that the outputs add business value, customizing the application to meet their unique needs, and aggregating the data. The value is in providing our customers with the knowledge and ability to transform their businesses to the next phase of their evolution, one that achieves strategic goals and optimizes the performance of the organization through the methodology, tools, and data provided by the on-demand solution. These areas are difficult, at best, to address in a truly self-service manner or through standard product training offerings.

WebEx wants to ensure that customers have dotted the I’s and crossed the T’s when planning and executing a meeting. They do it every day, and they know where customers get hung up. On the other hand, Salesforce.com wants you to think about your sales goals and initiatives differently and define your data needs to support those goals: Why are you implementing this solution, anyway? What do you need to know about the opportunities in the pipeline across your organization to evaluate the health of that pipeline? What data do sales executives need to input or access to be the CEOs of their business? Without first thinking about your goals for using Salesforce.com, you cannot be assured of a successful implementation or the benefits the tool was designed to provide.

In a nut shell, SaaS products are self-service for some customers the way my attempt to teach myself to play guitar in the last year has been self-service. I have a guitar, and I can pick it up whenever I want. I have a “how to” book to teach me the notes on the strings and the most commonly used chords, and I can even go online to download guitar tabs that show me how to play my favorite songs. Yet, I still can’t actually play the guitar.

The fact is, until I decide what kind of guitar player I want to be (playing rock in a band, performing at a local coffee shop on open mic night, or strumming away in my back yard with the fire pit going), I won’t develop a plan to learn the guitar they way I need to meet my goal.

In my experience there is a natural conflict in SaaS companies between the need to be perceived as “self-service” and the need to support customers and ensuring their success. By focusing first on strategic, transformational services that ensure customer success, PSOs can help their companies strike the balance.

We all know the old saying in the media: “If it bleeds, it leads”.  The fact is, bad news still makes good headlines.  And today’s headlines are all about the economy. 

The media, it seems, is obsessed with economic bad news.  Maybe because we, as a society, are so afraid of bad news that, when we hear even the slightest hint of bad news, we tune it out.

Frankly, I don’t pay much attention to it at all. Not to say that I’ve got my head buried in the sand - I don’t.  In fact, we’ve seen some of our clients suffer from real economic challenges.  And, worst of all, some folks have lost their jobs.  That’s never good.

But I’m a “glass-is-half-full” kind of guy.  For me, I’m looking for signs of strength and opportunity, especially in IT services.  And, just so you know… I intend to find it.

For example, all of the traditional IT analysts (Gartner, Forrester, IDC, etc.) are predicting a very tiny sliver of growth in IT services for 2009.  Yet, somehow, this is being spun as “bad news” for the IT sector.

In my book, and in this economy, a tiny sliver of growth is not bad news.  In fact, it’s great news.  And consider that tiny sliver of growth they’re talking about is moving global IT services spending close to $1 Trillion a year.  That’s 1 Trillion with a capital “T”.

But that’s the optimist in me.  The reality is that, as services leaders, we’re all dealing with a multitude of pressures in 2009.  If you’re like any of our clients you’re under a lot of pressures to cut costs, improve utilization and drive higher revenue, just for starters.

In fact, see if any of these strategies sound familiar in your organization: 

• Grow Services Revenues
• Reduce OpEx
• Redeploy people
• Speed up Services Sales Activities
• Restrict Hiring
• Improve Margins
• Increase Utilization
• Drive Better Customer Experience

Really! I mean, how does one drive-more-sales-faster-with-fewer-people-and-no-new-hires-so-that-I-can-increase-utilization-to-reduce-OpEx-and-improve-margins-while-improving-the-customer-experience?

In our company, we call that “running around the building with our hair on fire.” We call it that because, well, that’s what it feels like.

So, if you’re an IT services leader at a product company, you’re going to have to pick your battles for 2009.  This may be a good time to take a look at how you go-to-market and create or improve services strategies that align with each customer segment.

Here’s what I mean by that.

Most product companies segment business customers into three different groups.  And, regardless of what your organization calls them, they probably fall into these simple categories:  Enterprise, Mid-Market, and Small & Medium Business.

In other words, think of your business customers as big, medium and small.  And each of these customer segments deliver different levels of revenue and profits for your organization.  Therefore, they each need a different level of services involvement from you, especially when you’re challenged with restricted headcount or reduced OpEx pressures.

An easy way to segment your customers is to sort them into the three service activity levels required by you:

• High Touch, High Involvement
• Low Touch, Partnering
• No Touch, Outsourcing

If you want to maximize your services organization’s value in these tough economic times (and stop running around the building with your hair on fire), consider these strategies.

• Put Your Best People on Your Most Profitable Accounts (High Touch)

  This may seem like commonsense and most of us would agree that this is right thing to do.  But, before you breeze over this, consider that it’s not as easy as it may seem.  Your most valuable and profitable customers require a high-touch, high-involvement strategy from your services business.  Makes sense, right?

  Yet, ask yourself how many times your organization has had to take one of your highly-skilled and most valuable consultants off an important and profitable client to deliver a short-term, transactional product deployment service?
  Experience shows that selling, managing and delivering short-term transactional (packaged or SKU-able) services is distracting and difficult at best.  Because of its high-volume, high-velocity nature, transactional services are unprofitable for most services organizations.  And the amount of churn and resources required for this business will eat up valuable time and energy and take away from your most important customers.

  Service executives tell us over and over that they spent 30-40% of their best peoples’ time supporting and delivering this type of transactional service yet it only accounts for up to 10% of their overall services revenue.  Does this sound familiar?

  There’s no argument that these short-term transactional services are important to your business.  After all, these packaged services make it easier to sell and deploy your products. 

  Yet, as a services executive, when you take your best people away from your most valuable customers, these customers are negatively impacted.  And if product sales to your big, enterprise customers start to suffer, I’m sure you’re going to be hearing from your sales reps. 

  So, keep your best and brightest people on your most profitable customers.  Protect these clients.  Grow you business within these accounts.  It’s vitally important in today’s economy. 

• Empower Your Channel Ecosystem to Service Mid-Market Accounts (Low Touch)

  Mid-Market customers need to be serviced by your Channel Partners.  In this segment, you can best support your Channel Ecosystem by empowering and credentialing your partners to become even more self-sufficient.  Most would agree. 

  Yet, Mid-Market customers are typically your Channel Partners’ biggest customers.  And, just like you, your Channel Partners want to put their most talented resources on their largest and most profitable accounts.  This is where things start getting slippery. 

  Oftentimes, product companies will rely on their Channel Partners to deliver short-term, transactional deployment services.  But in most cases, the Channel Partner has the same set of challenges you do.  They, too, want to put their best people on their best customers.  Yet the churn and velocity of short-term transactional services starts to pull them down as well.

  So, when these transactional services are delivered poorly by your Channel Partners, it can negatively impact your own organization.  Why?  Because when transaction deployment services go wrong, the end-user customer is going to escalate a support call to your services organization, not the Channel Partner. 

  Now, you’ll have to send out one of your best people to go fix it.  Now, you’re distracted again.  Now, you’re taking your best and brightest people away from your most important customers.

  So, what’s the solution?

• Carve Out and Outsource Your Transactional Deployment Business (No Touch)

  By nature, transactional deployment services are characterized by high-volume, high-velocity, rapid fire activities.  Yet, it’s also a double-edged sword. 

  On the one hand, the high-volume, high-velocity nature of this business means more sales to your company. It’s the long tail revenue stream. 

  On the other hand, the amount of churn involved with delivering these services can drag down an entire services organization.  Now, as we discovered earlier, your biggest and best customers are suffering.

  If your company sells hundreds or even thousands of transactions a month, then you’re probably experiencing a never-ending barrage of calls, opportunities, requests, projects, updates & changes.  This is where clients tell us they feel like their hair is on fire.  Does this, too, sound familiar?

  This is where partnering with a service provider that specializes in rapid deployment transactional services can provide relief to your organization - especially in these economic times when you have limited resources. 

  Partners who specialize in transactional deployment services utilize specialized business processes, delivery methodologies, and integrated Professional Services Automation (PSA) tools specifically tailored to this unique and challenging business.  These service providers can now create a high touch feeling in your no-touch business segment.

  With the right outsourcing strategy, you can even turn your transactional deployment services business into a profit center and eliminate the churn and distraction inherent in this segment.  Now your best and brightest people can focus on what they do best - taking care of your biggest and most profitable customers.

Remember, times are tough.  Belts are getting tightened and you can’t boil the ocean.  So, pick your battles.  Smart organizations who are segmenting their services strategy and outsourcing transactional deployment services are the ones that will be in the best position to capture their unfair share of the new IT services market this year.

What attracts the best talent? How do you keep them? If you want to make your life easier, then do a better job of delivering the five things that your people want, expect, and deserve.

1. To work for an organization they are proud to be associated with.

   People like to be associated with organizations that have their act together--those that have lofty ideals, important missions, and inspiring visions that align with the employees’ personal value system. Foremost in desire is integrity, where organization leaders model and reinforce what their words define. Working for this type of organization is invigorating and fun.

   Ponder Point: What can you do to build pride in your team?

2. To contribute.

   Employees who believe in an organization’s cause want to contribute to accomplishing it. They want to be given lots of responsibility and to be personally challenged with the chance to test themselves by performing new tasks in new ways.

   Action Step: Ask all your high-potential players what important issue/idea/problem/opportunity they’d like to address, and let them at it.

3. To be respected as the professionals they are.

   Just as craftsmen of old looked to their guild for the accepted standards of quality, today’s knowledge workers look to their professional association for benchmarks of performance--not their employer. Employees expect their organizations to understand and apply these professional standards to them when discussing performance expectations, negotiating desired actions, and acknowledging achievements. This offers a win-win opportunity for everyone, as professional standards are usually higher than those normally imposed by the organization.

   Common Sense: Treat your professionals as professionals.

4. To be treated fairly.

   Although many organizations work hard to keep it a secret, employees know how other employees are treated: what their compensation packages are, which departments have the most flexible work hours, who goes to the conferences in Barcelona. Furthermore, except for an extremely small percentage, modern workers want their measures of performance to be based upon their contribution to achieving important goals, not on how hard they work, how long they have been employed, or the depth of their relationship with the president’s children.

   Furthermore, although management may not be aware, employees know which of their peers deliver the most value to the organization. In today’s team-oriented workplace, individuals quickly separate the performers from the laggards. Workers want to receive similar rewards and recognition to those that deliver similar value, either inside or outside of the organization.

   Reality Check: Assume that everyone knows everything, then act accordingly.

5. No hassles

   In most situations, employees don’t ask for much from management. They want clear and realistic objectives that align with the organization’s mission, along with goals and streamlined work processes that make sense. They want the necessary information, time, and tools to do the work, and fair compensation linked to objectives. They want fast, specific, and accurate feedback on performance as well as enough power to “do what’s best” in a situation, and not worry about later rebuke. They also want input into creating all of the above. That’s about it. So get out of their way. They will call you when they need you.

Cold, Hard Reality: If you’ve hired the right people, they know more about their job than you do, so let them work. Remove obstacles, don’t add more.

Address these five things that your people want, expect, and deserve, and watch them make you successful.

*Adapted from The e-Impact on Business Performance: Leveraging the Internet for Competitive Advantage. James A. Alexander. August 2000.

Jim Alexander is founder of Alexander Consulting, a management consultancy that creates and implements professional services strategies for product companies. Contact him at 239-283-7400, alex@alexanderstrategists.com, or visit http://www.alexanderstrategists.com.
Alexander Consulting

2008 was an eventful, prosperous year for the project management practice, project management service and solution providers:

- Several independent vendors merged with larger entities; many more new small companies with innovative technologies emerged onto the scene. Given the poor macro picture, the amount of M&A and startup activity in this space shows how much interest there is and how much more there is to do in order to improve in project management.

- What do you mean you don’t do on-demand?! On-demand adoption surged in 2008 and is now the standard way to deploy project management software. In fact, the tables have turned. Vendors that do not offer on-demand solutions look out of place and out of touch with the market.

- Project management continued to gain credibility as a legitimate profession that is very much in need given today’s complex project, workforce, market realities and regulatory requirements.

- Working remotely, virtual offices, working from home, are now almost as accepted as working from the office in an increasing number of industries and work types. It is now common to find work arrangements that account for some work being done from a home office.

The stage has been set for some very exciting changes in the project management world. In a three part series, I discuss ten potential project management trends that may be more prominent in 2009.

# 10. The Increasing Correlation Between Project Management and Operational Excellence

It used to be that senior company executives such as the CEO, CFO and board members would generally stay away from project management related decisions. The expectation was that CIO, COO and other operational executives would “take care of” ensuring that the company has effective project management practices. In fact, most executives generally regarded project management as something the “techies”, field-level workers and mid-level managers should worry about.

In today’s highly competitive flat world, the “Chinese wall” between executives and operations has broken down. In 2009, we will continue to see increasing sponsorship, collaboration, and direct involvement of senior executives in project management initiatives. Senior executives have come to appreciate the direct link between effective project management processes, best practices and tools and operational excellence. This task is no longer delegated away and deemed to be a tactical activity. Senior executives and board members view project management improvement initiatives as a strategic investment.

# 9. The CFO and the Project Manager Friendship

An increasingly project-based service-oriented economy has led to more complex customer engagements and billing arrangements. By instituting charge backs, even internal departments have to justify their costs, deliver services efficiently, and earn the business of other entities within the same organization. Consequently, for CFOs measuring project value and recognizing revenue in compliance with various GAAP (Generally Accepted Accounting Principles) cost accounting and revenue recognition regulations has become an even more daunting task. 

The intricacies of estimating project value have created unprecedented ties between financial executives and projects managers who have to collaborate to produce incontestable project value assessments that can withstand the various forms of potential financial and project audits the organization may be subjected to. Given the current trends, the CFO/project management alliance is likely to grow stronger in 2009.

# 8. The Rise of the Project Workforce

As explained in my book The Rise of the Project Workforce (http://www.projectworkforcebook.com) more and more individuals choose the projects they want to work on rather than the company they work for. Similarly, more companies are adopting the Hollywood model for a larger percentage of their workforce.  In this model a project team is quickly assembled to execute a well-defined objective; the team is just as quickly discharged once the project (the movie) has been completed. This flexibility makes both the company and the workforce more agile in a rapidly changing competitive marketplace.

# 7. Dispersed Customers, Projects and Teams Kill Politics

The flat world and access to a global talent pool has significantly changed the inner workings and team dynamics of virtually all organizations. There are many disadvantages to working with remote dispersed team members, which most of us are doing today. We tend to be happier, more loyal to the team, learn faster, and accomplish more as a team when we work physically close to each other. On the other hand, there are less emotions and politics with a dispersed team; people tend to pay more attention to getting the work done, than playing office politics; and their performance ultimately dictates how they are evaluated.  In today’s increasingly dispersed teams office politics is certainly on the decline.

# 6. Finding the Right Talent Gets a Lot Easier

It is much harder to find the matching resources you need when you limit yourself only to looking for talent in a local market. The flat world, Internet collaboration technologies have made it possible for organizations to tap large remote pools of talent at very competitive rates. For example, at Tenrox, we are increasingly leveraging specialized programmers working (probably) from their homes in Russia, Eastern Europe and at outsourcing shops in India. These resources are not replacing our full-time staff; they complement our team by working on projects on a need basis. It allows Tenrox to remain flexible, not to over-hire, and yet quickly staff projects when required. With better collaboration technologies, improving quality of global resources, and our own improved knowledge of how to manage such projects, this process is becoming a lot easier and rewarding to execute.

# 5. Emphasis Shifts from Project Management to Workforce Management

The project management discipline has traditionally emphasized the science of project management. Project managers and contributors are encouraged to follow strict templates, guidelines and steps to ensure a project is executed successfully. However, in spite of the increasing number of certified project managers and great project management tools, projects continue to show high failure rates, or high rates of disappointment by being too late, cost too much, or not fully meet their intended objectives.

Numerous studies have looked at why projects disappoint. Many of these studies often conclude that better project management, communication, stakeholder involvement and change controls would have reduced failure rate. However, as books like Built to Last (Collins Business; 1 edition; November 2, 2004) suggest while best practices and better tools help there is nothing more important than picking the most qualified and best-fit resources to run the project (what Jim Collins called having the right people on the bus). Having the right people on the team makes everything easier; in fact, less process and less enforcement is needed since great team members innately know what needs to get done and just do it. As a result, more and more organizations are investing in cataloging their resources, understanding their resources’ capabilities and interests, and using more sophisticated workforce planning tools to find the best resources for their projects.

# 4. Uncertainty is the New Normal

The unceasing uncertainty we have all felt about our jobs, our homes, the economy and the world in the last two years is going to be with us for the foreseeable future. The credit crisis, terrorism, climate change, and prolonged wars will continue to directly and indirectly impact our lives, our psyche. However, with human being’s remarkable ability to adjust to any situation we are starting to get used to it! When this whole war/economic mess started I remember how shocked and surprised I was every time I turned on the TV. Now, I do not watch as much predictably bad news anymore, and when I do, I know it will be bad .... so it does not really bother me nearly as much as it used to.

# 3. The Rapidly Increasing Service Web

The business model of virtually every large monolithic company is under attack. The Web has enabled small, fast-moving, low-cost global competitors to emerge virtually overnight. This is even more true in the enterprise software space. Small companies with deep expertise in a particular problem area are able to build and offer Web service based solutions that solve the customer’s pain point a factor of time-cost faster than the ERP/established vendor alternative. With ever improving collaboration, Web services and integration technologies this trend will only accelerate in 2009.

# 2. Enterprise Software Technology Cross-Pollination Gains Momentum

Web services and new technologies continue to create a powerful seemingly perpetual wave of innovation in productivity tools. One of the more recent developments that is starting to gain further momentum has been the surge in hybrid software technologies. Here are some examples (with varying degrees of success):

• ERPs offering and embedding analytics
• Project management vendors embedding business process management capabilities (true enterprise class workflow engines)
• Project management and workforce management (not just time tracking but also workforce planning, time for payroll, leave time and other integrated HR/labor related functions/services) hybrid applications
• Accounting systems offering CRM and other enterprise solutions

# 1. Leadership Matters

Above all, I think one of the most important lessons of the last several years has been the critical importance of the leader. It does not matter who is on the bus, what great technologies one has access to, how many best practices you are fully versed in, it is all for nothing if the people that lead your organization and projects lack the leadership skills and intuition to make the right decisions. An incompetent leader can lead the best team, the best technologies and the organization with the most abundant resources to total and shameful failure.

The primary reason we are in the mess we are in now is extremely poor ignorant leadership at some of the largest public and private institutions throughout the world. We have learned, the hard way, that choosing a bad leader or project manager can be hazardous to us, to our way of life. I think, in 2009 every single one of us, whether you are executives, members of a board of directors, members of a committee, voters .... will pay a lot more attention to who we pick as our leaders, representatives and our project managers.

These are my predictions about what to expect for project management in 2009. It should be helpful to consider these trends in your business plans to help you leap ahead of your competition.

BACKGROUND

Professional Services Organizations are often quite proud of the technical expertise of their personnel - and deservedly so. It is common to hear things such as “Sue is the best technical architect - there is nothing she cannot do with this product.” At the same time, how many of us have seen situations where the great technical resource:

In this article, I will explore what the PS organization can do to enhance the “soft skills” of its PS practitioners and ultimately drive more value to both the client and the PS organization.

WHY IS THIS A PROBLEM?

The key to this issue is related to the “Customer Experience.” Anyone who has been in a retail environment in the past two decades has gone through a designed customer experience; take Starbucks for example. The customer experience is designed by Starbucks to satisfy the various attributes its customers enjoy.

The concept of a customer experience is no different in the business to business environment. As your professional services resources are deployed in the field, they are not simply performing technical tasks. Rather, they are: 1) the face of your company to the end client; 2) your eyes and ears into new opportunities for your company’s software and services; and 3) creating a lasting impression (good or bad) in the minds of current and future buyers.

So, while your recruiting process identified great technical talent, and your training programs educated the new hires on the intricacies of your product, it is very likely that you have not prepared your professional services resources to effectively operate and interact with the most important people to your business: your customer.

DEVELOPING A WELL-ROUNDED PS STAFF

The pyramid is an often discussed shape in the consulting and professional services industry. As RTM Consulting thinks about developing professional services practitioners, the pyramid is an apt metaphor.

TYPICAL SKILL CONTINUUM DEVELOPMENT

As PS practitioners enter an organization, they typically come with the requisite Technical Knowledge and organizations will then train them on their specific Product. The training is very often well thought-out and extremely thorough. As it should be - no one wants to put someone without a depth of product knowledge in front of the customer.

As practitioners develop and get staffed on a variety of projects, they start to pick up skills based on experience. They see how project managers operate, how to put together a work plan, and how to address an issue. Additionally, they are handed templates for issue management and status reporting. In effect, they learn by doing. Generally they do a decent job, but in reality, it is a little bit of luck that determines who succeeds and who does not.

Lastly, for those practitioners that keep developing skills, if they are fortunate, they will find a mentor that can help them truly become a “trusted adviser’ to their client. The nuances of communication these folks develop help them navigate difficult situations; explain difficult and challenging topics to a client in a way that the client not only understands the issue, but also the implications. Additionally - and more importantly - mentors help these fortunate few practitioners understand how to identify and capture value. Yes the word dreaded by many PS practitioners: SELLING. Not selling in a used car sort of way, but rather, identifying client pain points and opportunities that your software and services can address.

PROACTIVE SKILL DEVELOPMENT

The challenge to the Traditional Skill Development approach is that it leaves too much to chance - for something that is so critical to your business. Delivering a satisfactory - if not outstanding - customer experience requires that your PS practitioners be able to address all layers of the skill continuum.

I started my career with a Big 6 consulting firm with a comprehensive training facility. Sure, I learned a great deal about technology and analytics at this facility. However, there is one key lesson I learned that which sticks with me nearly 20 years later. Bear with me while I share the story - as it points to the benefit of proactively addressing skill development.

The course was designed around ‘successful client relationships.” I was a young consultant, 1 or 2 years on the job, doing a “role-play” exercise with a client; keep in mind that the session was being videotaped so that my peers and I could review and critique performance. Needless to say, I walked into the client’s office: 1) aimed to please; and 2) confident that I would excel at the exercise. After the standard small talk, we got down to business.

“Absolutely!" I confidently replied as I walked out of the office.

Any idea how this turns out? All of my peers and I failed miserably at achieving the real goal. I had just agreed to perform $1.5M of scope creep. Fortunately, it was done in a safe environment - and it did not result in a cost overrun. The remainder of the course was focused on identifying, practicing, and internalizing the appropriate way to deal with these client situations.

Scope management was not left to chance. Neither should any other layer of the Skill Continuum be left to chance.

The Professional Services Skills Continuum highlighted above identifies the core skills required to develop a well-rounded professional services practitioner:

My early experience at the Big 6 Consulting firm - as well as my work with a number of Consulting and Professional Services organizations - indicates that you need a formal program that includes a combination of lecture, case study, and experiential learning. As in any classroom setting, you need to explain the “theory” of what you want the Practitioner to learn.

Typically this is best delivered by experienced Professional Services personnel so that the theory is coupled with real life examples; making the course a rich mix of both theory and experience. In order to ingrain the lessons with the student, I have found that integrating case studies into the lecture can have significant impacts. Done right, case studies force the student into an experiential learning process. That is, they have to think and act like they were out in the field. Since the material may be new, it may be uncomfortable for them - this is good. They are in a safe environment, where experimenting and trying new techniques can help them better incorporate the learnings into their own behaviors.

Lastly, do not end the education at the end of the lecture and case study. Create follow on forums (e.g., brown bag lunches, monthly conference calls) where the students can come together and discuss how they are applying the lessons they have learned. These follow on forums have multiple benefits: practitioners get to hear what others are doing - giving them the confidence to try the same methods; in a safe environment you can discuss how you might potentially address a situation and gain the feedback of others; and you force the practitioners to continue to think about the lessons learned so that it is not “just another course” that was attended then disregarded.

CLOSING

We have all heard the phrase, “It is much cheaper to keep a customer than it is to find a new customer.” Yet, most organizations invest more money in chasing new customers than in doing the things required to create a positive customer experience. By proactively addressing the Professional Services Skills Continuum, Professional Services organizations can prepare their front-line personnel to better manage client relationships, deal with difficult client situations, and proactively identify new “win-win” business opportunities.

ABOUT RTM CONSULTING AND THE AUTHOR


Cincinnati-based RTM Consulting provides strategic and operational advice to assist technology companies with increasing revenues and margins, by leveraging professional and consulting services more effectively. Specializing in Global Resource Management and Professional Services Business Optimization, RTM Consulting helps IT hardware, software and pure consulting businesses achieve the benefits associated with a successful professional and consulting services portfolio. With its unique Business Acceleration Services and focus on operational excellence, RTM Consulting helps large, medium and small firms move beyond theory to practical application of industry best practices and achievement of exceptional results in the shortest possible period of time.

Mark E. Sloan is the COO of RTM Consulting. Mark is an industry pioneer with respect to defining and deploying Global Resource Management processes for Consulting and Professional Service Operators. Mark is a frequent speaker at professional services industry events. Prior to his current role as COO and Senior Founding Partner of RTM Consulting, Mark held a number of executive consulting and entrepreneurial roles with Accenture and Convergys.

©2009 RTM Consulting, LLC. All rights reserved.

Anyone who knows me, knows I am not often at a loss for words. I must admit, that with all of the negativity and erosion around us, it is hard to know what to say. It is hard to decide what to focus on first, what will reasonate best, and most importantly, what will ensure that we do not offend some very weary clients who are dealing with issues that most have not experienced in their careers. I have actually been able to boil it down to one word; cash.

Nearly every client today is running and re-running 13 week cash flow models in real time. They are monitoring cash by the minute, as if it was a heart monitor in the intensive care unit. Since credit markets are so tight, should a company fail to accurately depict its cash position, and be unable to meet its creditor obligations, a whole host of crippling repercussions can take place. That is where you come in.

If you are to succeed in tough times such as these, you must focus on CASH. You must ask yourself each time you attempt to pitch a solution to a client “How will this enhance their cash position?”. This will get the maximum attention and the highest likelihood that they will take an interest in your pitch. As a consultant, I have always said that we win when we can clearly articulate that we understand a client’s pain, and that we have a solution that will be some form of triage. Rest assured, regardless if you know it or not, many, many companies are in cash pain today.

So how can you best align yourself with your client’s pain? You can ask yourself the following 3 questions:

1. Does this solution reduce payroll/headcount?
2. Does this solution reduce SG&A expense?
3. Does this solution allow the client to forgo anticipated capital spend?

While many of us have focused on increasing revenues or improving efficiencies in the past, those two approaches are merely just the other side of the “cash coin”. Don’t expect a client, who is dealing with rapid erosion in the marketplace to be receptive to a pitch about revenues or efficiencies unless you are clearly correlating those results to an improved cash position.  To do so will ensure that in this marketplace, you are speaking their language, and that you understand the true pain point in an abundance of businesses today.

Deliverables are at the Heart of Team Collaboration

One of my favorite words in professional services is “deliverable”.  It captures the transformation from abstract thinking to tangible result.  It says, “Ideas were floating in the air between us, and now they have become something.” There is a great deal of satisfaction that comes from a well crafted crystallization of ideas into direction.  But more importantly, there’s a great deal of wasted time that’s avoided by creating a well crafted deliverable.

In most professional service situations the work we do involves enough time, people and complexity that incremental deliverable creation is a constant process throughout the project.  Statements of work, project charters, diagrams, functional specifications, data models, screen designs, object models - let’s face it, it’s a long list.  Crafting them well is a critical skill set and a key part of what makes projects go well.

However, as much as a great document is a thing of beauty all by itself (ok, maybe that’s a little over the top), deliverables don’t DO anything by themselves.  They only tee up the next step for someone else to take over and DO something.  Even a finished software product is, in the end, just waiting for users to sign in and DO something.

So if that’s the case, then let’s not accept a weighty document as a justification for itself - let’s force it to optimally support the next steps in the process.  In order to do that I’ve been focusing lately on three fundamental aspects of deliverable creation in order to get the most benefit out of each design stage.

1. They should help you think
2. They should stack, and
3. They should serve the consumer

This “back to basics” approach has me revisiting our design process and deliverables and looking for things that don’t contribute to these goals.  This economy is the perfect time to trim fat from processes and cut down project thrash.

Thinking with Deliverables

System design, like any collaboration, boils down to evolving ideas from general descriptions to specific instructions.  The trick is to create design documents that help the team move incrementally through the thought process from the overview to the specifics.  The defined documents in the process should capture common “reality check” points where group confirmation of the direction is necessary.  They should also work to isolate particular aspects of the design process and allow clear thinking about just that element.

For example, it’s possible in custom software development to build a system by diving straight into screen prototypes.  However, when this happens people get wrapped up in the screen design and often lose track of important factors like understanding the most likely order of execution of the user tasks, or building a fundamental understanding of the domain and data model.

Assess the deliverables you use to see how well they serve in moving projects from generalities to specifics in an orderly fashion and how sensibly they bring focus to individual design aspects and then move through them in dependency order. Find out whether the evolution of the process or the rotting of procedures has broken the basic design narrative that leads your teams from big ideas to execution details.

Deliverables that Stack

It’s easy to lose sight of the big picture and make deliverables that adequately address the phase you’re in, but become awkward and time consuming when trying to apply them to the next phase.  When you can define a step 1 that really is half of step 2, and when step 2 is completed it turns out to be half of what’s needed for step 3 then you’re accomplishing a couple of goals:

1. Each step in the process leads directly to the next so logical disconnects are minimized.
2. Redundant work is removed from deliverable creation, saving time and errors.

On the technical side, system architects work in diagramming languages like UML and then use code generation tools read the diagrams and stub out the code for programmers to fill in.  This is a great example of creating a first deliverable (design ideas) that is supremely useful for creating the next deliverable (code).  The progress the industry is making towards tying front-end design deliverables more directly into code production is great, but there is still alot of room to improve this flow in the business arena.  Search for redundancy between deliverables and see if you can narrow those elements down to a single format that “stacks” into the next deliverable.  For example, it’s not atypical to see a pattern like this:

Deliverable #1 - describes things a system will do - usually in big fluffy paragraphs.
Deliverable #2 - breaks down the system activities into curt phrases and diagrams that show order of execution.

Why not do the initial system description in deliverable #1 in bite-sized “user stories” that can be plugged directly into flow chart boxes and arranged into order of execution?  Let deliverable #1 be the first step of deliverable #2.  Let the work done in deliverable#2 focus on the chronology instead of re-describing system activity.

Make Sure the Deliverables Serve the Consumer

Not every deliverable can stack.  At some point a person receives Deliverable A and transform it into a radically different Deliverable B.  The classic example of this is programmers taking a functional specification and transforming it into a coded system.  Although tools exist to speed that process along and do some stacking, there is still a volume of information that can’t directly BECOME code.

In that case the goal is to make sure that the way the deliverable is provided will serve the consumer’s need to DO something with it in the best way possible.  It’s entirely possible to correctly describe a system in a functional spec in a way that will immediately give the technical team a migraine.  Usually this is because the format:

1. Does not synchronize the organization of the deliverable with the order the work it supports must be done in.
2. Does not divide the the deliverable along common resource assignment break points.

The best way to approach this is to have cross functional teams sit down with deliverable formats and share their pain.  It’s likely that every day in your organization people receive direction and deliverables that are flawed and - if anyone asked them - they could tell you just what’s wrong with them.  By having teams that have frequent hand-offs of deliverables meet to improve the process they can become aware of minor changes that create big advantages.

The Cumulative Effect

Tuning and refining deliverable formats and quality is like statistical quality control in manufacturing.  If you can control the quality of every step in the process then the quality of the end product will automatically be more on track, waste will be lower and profits will be higher.  In professional services the steps we need to control are the incremental deliverables created during design and production.

So finding better and faster ways to make these hand-offs clean has the potential for big payoffs.  Work on your document formats and definitions to capture these benefits.  And once they’re defined logically and your staff is trained to know how to execute them, start thinking about a program where consumers of deliverables get to “grade” what comes to them.  Give the people who build them some incentive to make sure they not only follow the format but produce quality content according to their peers and “customers”.

You can’t turn on the TV or the radio, or pick up a newspaper anymore without hearing another doom and gloom scenario about the economy.  Sure, times are tough right now, but remember - nothing lasts forever… not even economic downturns. 

I’ve been reading a lot lately about how companies are reacting, and for the most part, there seem to be two primary schools of thought:  drastically cut costs in the short term and try ride it out, or take the opportunity to reevaluate operations and make the changes necessary to become more efficient and productive in the long run.

Well, I’m not big on the “try to ride it out” approach, so if you’re like me, then it’s probably time to take a good, hard look at your business processes with a fresh set of eyes and ask one simple question - are we doing absolutely everything we can to run our business as efficiently as possible?  We recently asked ourselves that very question, and found several opportunities to improve. 

Not surprisingly, we found that internal projects aimed at improving operations - particularly those that were time or resource intensive - were the ones most likely to have fallen by the wayside when “more pressing” business issues arose in the past.  And throughout our brainstorming sessions, several of our ‘new ideas’ turned out to have been proposed before, and even started, but never pursued to completion. 

Some were process oriented; some were simply a matter of “spring cleaning” - taking the time to organize things and eliminate distractions and clutter; others related to getting more value out of tools we already have in place - taking the time to better understand and implement functionality that we were paying for but not yet using.  Some even involved making investments in new tools that we could no longer afford not to have.  In other words - all things we should be doing anyway, but which now carried a greater sense of urgency.

And so we looked at all of them, determined which ones would have the greatest bottom line impact relative to the scope of effort needed to complete them, and set forth a plan of action to finally get them knocked out.

The other determination we made was that we would not be victims of the doom and gloom mentality that is plaguing so many organizations right now.  We watch the news just like everyone else - and if you’re not careful, it’s easy to feel complacent, if not powerless to do anything about your current business environment.  And while it’s true that you probably don’t have the power to greatly influence external factors like the marketplace, you almost certainly have tremendous power to examine and improve the internal factors that can insulate you against the current challenges you and others face.  In our case, we already knew what many of them were, and just needed to make the commitment and take the time to finally address them.

So we did.  And something amazing happened:  As people had the opportunity to work on those long-delayed projects, and to do so with a real sense of contribution to the health of our business and to each other - they started becoming more motivated and more engaged with each passing day.  And that optimism has been more infectious and more powerful than anything on the news.

So now, instead of operating out of a sense of fear or panic about the things that are out of our control, we’re taking firm control of the factors we can influence.  And as we begin to complete projects that people have wanted to do for years in some cases, the resulting sense of accomplishment and momentum has paved the way for new and innovative ideas that will help us better serve the marketplace moving forward.  And that’s exciting for everyone.

The key here is that most people will gladly seize the opportunity to make a difference, if only given the chance.  So rather than just trying to ride out the current ‘crisis’, I would challenge you to identify the shelved projects that you’ve talked about forever - that people actually want to work on and to put in the extra effort to see them to completion.  Not only will you find your team engaged and willing to work on the ideas they’ve been passionate about for so long, but your business will become more efficient and productive as a result. 

There’s an old adage we try to live by here that says essentially “It’s always the right time to do the right thing.” There’s a good reason the same ideas keep coming back up.  You already know what the right things to do are - so just do them.

All services executives and professionals are challenged with how they should track and measure utilization.  Utilization is a pertinent issue to all services organization, whether it is a consulting firm, software vendor, or other project based organization.  Maintaining high utilization of your employees drives higher billings, higher revenue and ultimately higher profits.  It is a critical measure of your financial success and sustainability.  There are three levels of utilization that can be used by companies.  Some companies will focus on one level, while others will focus on all three.

Level One - Resource Utilization

Resource utilization measures the time your resources spend working on useful projects and tasks.  “Resource Utilization” measures the allocation of a resource on a specific set of work, including client and internal work, and tends to ignore “on the bench” time during which the resource is neither working on billable nor non-billable work. 

Measuring “Resource Utilization” helps managers minimize administrative work, is usually the easiest metric to measure, and is the easiest to act on.  If a resource is on the “bench” and not billing her time, at least the company can have the resource work on valuable internal projects or sales efforts.

Level Two - Billable Utilization

The next level down is “Billable Utilization”, which measures the time your resources spend working on billable projects and tasks.  The time spent on “internal” projects or business development is not included since this time is not billed to the client.  “Billable Utilization” is almost always less than “Resource Utilization”, which includes hours spent on internal projects and business development.  For instance, a resource may be 90% utilized overall (Resource Utilization), but not all time was billed back to the client, so “Billable Utilization” may be closer to 70%.

Level Three - Realization

Realization is a measure of how much of a company’s revenue capacity was captured. The goal of this calculation method is to determine “how much of the time the resource spent on billable work was actually billed back to the client”.  Time spent on internal projects and business development is not included. 

Realization is a useful metric since it involves hours and rate and gives some indication of where a company gives up money (e.g., in the sales process, in the collection process, or in delivery).

The appropriate baseline

Available hours, the denominator in the utilization calculation, is one of the most highly debated topics among professional services professionals.  Should it be?

• 2,080 hours (40 hours per week * 52 weeks)
• 2,080 hours less company holidays
• 2,080 hours less company holidays and personal vacations
• A more arbitrary number, such as 70% of 2,080 hours

Available hours also can differ by country, so global firms have to be very careful in how it is calculated.  Again, there is no right answer, just what is right for your company.  The most common number used in the industry is 2,080.  Using this baseline will make your utilization numbers transparent in your company as well as when comparing your performance to peer companies.

What is the right target utilization for my company?

Once you decide on the correct utilization, either billable, resource or both, for your company, the next step is to tie this calculation into compensation.  What is the right target for your company?  It depends on a few factors, including:

• The utilization calculation method that your company is using
• Benchmarked utilization rates for competitors and peer companies
• Your company revenue and margin targets

For example, if the baseline hours that are used in the numerator of your utilization calculation are 2,080 hours, then 100% billable utilization targets would not be feasible.  You would need to subtract company holidays, vacations, sick days and potentially “on-the-bench” time from your baseline to determine the appropriate target.  In this case, 70-80% utilization would be an appropriate target.  Conversely, if the baseline hours that are used in the numerator of your billable utilization calculation excludes company holidays and personal vacations, then an appropriate utilization target would be higher, perhaps 80-100%.
There are many benchmark studies available, so before settling on a utilization target, you may want to consult additional sources of information.  In addition to looking at peer company data, another data point to use is the calculated utilization target per resource that allows your company to meet its corporate revenue and margin targets.

For example, let’s assume that your billable resources have a fully loaded cost (includes salary, bonus, benefits and fixed cost allocation) of $200,000 per year, your average rate per hour is $200 and your corporate gross margin goal is 40%.  To achieve a 40% gross margin, each resources needs to bill $333,000 to clients. At a rate of $200 per hour, each resources needs to bill 1,667 hours.  If your company uses a baseline of 2,080 hours as the denominator in the utilization calculation, then your billable resources need to target 80% utilization.  However, if your company excludes company holidays and vacations from the baseline hours (denominator), then the utilization target is closer to 90%.

Critical to measuring and managing against both overall and billable utilization is the understanding that time capturers are often not in control of their own destiny.  Resource managers are responsible for staffing, and the organization’s commitment to skill development can be an important factor in determining your company’s target utilization.

In closing, there is no clear answer to how a particular company should calculate resource utilization, but there are a few basic principles to follow when making this decision for your company.

One, it is imperative to keep the calculation simple.  By making the calculation simple, consultants will understand the goal.  If they understand the goal, there is a better chance they will beat the goal, and if they don’t, they should not complain.  If the calculation is not simple, it is understood by no one, and ultimately becomes a number on a spreadsheet that everyone is aiming towards, but does not really understand, which can hurt morale.

Two, ensure your calculation is globally consistent.  Whatever you decide is the right utilization formula for you company, it is critical that you apply it consistently and uniformly across all users.

Three, the inputs to your utilization calculation should not be controlled by the individual resource, but rather decided at the task or project level.  Take the human element out of the input, which will help ensure consistency in the application of the calculation.

Spring time.  The snow is melting and it’s a time of renewal. The first buds are appearing on the trees, golfers in the Midwest and East Coast are getting in their first muddy rounds and the sounds of the crack of the bat and the ball thumping into the catcher’s glove can be heard loud and clear across Arizona and Florida. America’s past time is about to give us all something to take our minds off the mess the financial system has wrought (except, of course, for us hockey fans who are looking forward to the pursuit of the Stanley Cup). Baseball also offers us a great example of how to use business intelligence strategically.

“Business Intelligence” is the new clichê for gathering, organizing and reporting on business-related statistics. We all do it and would never think about running a business without it. We collect the stats, run the reports, review the data and buy benchmarking reports to enhance the data - but never question the need for the data or the reason behind it! I would pose the question: How many of us REALLY use the data to create real intelligence that leads to strategic decisions? Decisions like “should I change the composition of my sales team?” or “should I create a new line of services?” or “should I close down a set of partners?” Experience tells me that most of us don’t. We either wing it or think we’re playing a better game than we’re actually playing when it comes to using Business Intelligence to make strategy adjustments. So let’s look at baseball briefly and see if it can help us use all this data strategically.

Collecting stats and keeping score is part of baseball culture and lore. How many of us learned to keep score from our dads while sitting in the bleachers at a major league game and asking dad “why do we put a K in the box for a strike out”? How often did we look through the box scores, which are in every newspaper for every game, to see if Mickey Mantle went 3 for 4 or did Ernie Banks pound a couple out onto Sheffield Avenue the day before? You knew the batting averages for all the starters and ERA for all the pitchers. You may even have known how many walks the leadoff hitter was able to draw and how many stolen bases he had as a result. And if you were a fanatic you could go to the bible of baseball stats published each year by Bill James and have EVERY stat ever collected in baseball. We all had deep, deep data and all of this before Al Gore invented the Internet. Heady stuff and - be honest - we’d love to do this for our businesses. Perhaps many of us have key operational stats on the tips of our tongues, such as “Joe the PM regularly achieves 85% utilization,” “Connie hits her booking targets month after month,” and “turnover on Pete’s team consistently is under 10%.” But do we go deeper and ask and answer the really tough but high-impact questions?

Baseball collects this info for a variety of reasons. Certainly the fans figure into things, but they do it for a couple of other very important reasons as well. First, the obvious: day-to-day operational decision making. We all have drills that we run when utilization starts to drop for a team or an individual, just as Joe Torre begins to adjust his lineup when his number 6 and 7 hitters stop getting on base. Second, the data is used to pay people appropriately. Manny Ramirez is currently a free agent looking for a club for this season and believe me, the GM’s know every one of his stats for his entire career and his contract will be laden with performance bonuses that are based on these stats in the same way that you’ll factor in margin, utilization, bookings, etc. into your comp plan for next year. Third, and most importantly, the stats are used to help improve the team’s record, the ultimate performance measurement. Billy Beane the GM of the Oakland A’s (and a member of the Board of Directors for NetSuite) has really illustrated the power of Business Intelligence applied strategically to baseball. This is where most of us can learn a heck of a lot from baseball, and Billy Beane specifically.

Most of us are probably familiar with the book Money Ball, written by Michael Lewis, describing how Billy Beane turned conventional wisdom on its ear in rebuilding the Oakland A’s a number of years ago. Billy was faced with the challenge that most of us live with every day. His bosses, the fans and the owners of the team, wanted a winner but couldn’t give him a budget equal, or even close, to his chief competitor, the New York Yankees. We can all relate. How many of us compete every day with Oracle or Accenture? In Billy’s case, he had one of the smallest budgets in the league. Very similar to a boutique going up against the big guys. So what Billy did was to analyze what actually won baseball games. As simple as it sounds, the answer was “score more runs than your opponent.”

Sounds simple, but as we learn when we read the book, for decades baseball had evaluated talent against a conventional set of criteria - including size, weight, batting average, errors and a lot of other data - that had no direct correlation to scoring runs. Beane and his team, which included a Stanford stats guru, broke the game down to it essentials: getting on base, advancing and scoring for position players and hits and walks for pitchers. Their theory was simple: the guys who got on base more, scored more, and the pitchers who kept people off of the bases won more games. From this they began to study a whole new set of measurements such as on base percentage, runs scored, bases allowed, etc. They then went back and reviewed successful teams and players in the past, validated the theory and built the ball team from an entirely different strategic perspective. A position player’s ability to get on base and score runs no matter how they did it became more important than his batting average. A pitcher’s ability to keep players off the bases was more important than the speed of his fastball or whether he was 6’2” tall. Beane then completely retooled the scouting process. In a few years he had consistent winning teams that were exciting, competitive and profitable - all with one of the lowest payrolls in the major leagues. He did this by using the information (stats) strategically.

We can all do this as well. What the A’s (and subsequently other teams, including the Boston Red Sox) did isn’t magic but does require some very deep thinking about what is truly important to our individual businesses and the ability to think past conventional and traditional wisdom. And probably the most difficult element is the confidence to stand stiff in the face of the predictable skepticism and make real decisions to drive real change. In other words, strong and committed leadership.

Let me tell a story based on a real experience to illustrate this point. A few years ago I was asked by a long-time friend and colleague to help figure out how he could accelerate the growth of his business. His company, a boutique technology consulting firm, had a great reputation, a list of blue ribbon clients and some incredible operating stats, but they were having a hard time growing the business. He thought he needed more sales people and asked me if I’d help hire a couple of “knock ‘em out of the park” sales types. We did a focused strategic review and yes, they needed some sales help - but not anything like his initial ideas. We then dug deeper into the business and set some short - and long-term targets and metrics to measure achievement. All pretty standard stuff.

After a few months, however, we began to notice two things that seemed at odds. Business was growing, as measured by revenue, but some of the sales team were underperforming badly.  After a few more months it became clear to my friend that for years the method and data he was using to run his sales efforts was not right for him. He was using a lot of traditional methods that were not working (baseball’s conventional wisdom). When he began to use a different set of measurements and methods (Billy Beane’s on-base percent) not only did his business begin to grow (over 35% increase in revenue in the 1st year) but his confidence for the future rose dramatically. Most importantly, a couple of very important strategic changes became very clear to him and his board. He hasn’t won the World Series but he knows exactly what changes need to be made, and they’re huge, because he’s looking at his business intelligence strategically.

So, as you put your feet up and begin to enjoy another start to America’s pastime (I’ll be at the Shark tank watching the SJ Sharks make a run at Lord Stanley’s Cup) think about how you can be a Professional Services Billy Beane by:

• Putting conventional wisdom aside
• Digging down to the very basics of what makes your business win
• Understanding how to look at your data to match your basics
• Understanding the changes that you need to make to win your version of the World Series

What is the most effective way to communicate with your team and your organization?  Probably one of the most classic questions asked with no best answer other than “it depends”.  Why does it depend?  We’ve got access to all kinds of communication devices now - email, Instant Messenger, text messaging, e-newsletters, websites, etc.  The key is getting to know your community to figure out the best interaction.

Take the PSVillage Newsletter as an example.  I subscribe to get the newsletter electronically.  It comes with all kinds of great information, discussion groups, and links to helpful areas that I may need.  However, I know it’s a newsletter and it gets prioritized in the email queue until I get all those critical customer emails taken care of.  Is the delivery means effective?  Yes.  Does it demand response from me?  No.  Do I review it in a timely manner?  Honestly, it may take a few days but eventually I get to it.  This format suits the PSVillage community.  We are a group that wants to share information and communicate with each other informally. 

In thinking about your own organization, take the time to determine if you need to inform people, if you need responses from people, or if you are looking to encourage feedback/discussions among your group.  Not all of your communication needs to be handled with a single approach.  Email is effective in getting the information out there but there are LOTS of emails out there.  Using options like read receipts can help ensure people are accessing the email but unless responses are required, you cannot determine if the email has actually been read.  Newsletters are a great reference provided they are relevant to the audience and regularly delivered; if they become sporadic, then the audience doesn’t rely on them for information as much.  Websites become a good site for posting reference information and may also serve to encourage discussions using tools such a blogs or discussion groups.  Instant Messenger (or similar tools) gives you more of an “in the office” feel with user interaction expected - something that can easily lead to distractions if etiquette is not laid out.  The communication method you need may span one, some, all or more of these options.

Now think about the type of community you are dealing with.  Are they on the road a lot?  Are you dealing with multiple time zones?  Are they at customer sites?  This will drive how information would best be received and accessed.  If you’re posting everything to an internal website which requires internet and VPN access, your mobile team may run into difficulties accessing it.  If your team is primarily at customer sites, having random Instant Messenger windows pop up with questions may not go over well.  Email and Newsletters ignore time zones and can be read on your own time so time critical responses may not be received when expected or desired.

It would be helpful for your organization to layout a communication plan.  What types of information or feedback do you send and receive?  What is the frequency?  Who are the recipients?  What is the communication method you prefer?  You may have your Project Managers creating communication plans as part of their methodology but you can apply the same technique to your organization.  Make it available to everyone so there’s an understanding of what is critical, what is informative, and what is meant to become a community building tool that will benefit everyone.  Take the time to also setup an etiquette guide for things that are a bit more dynamic like email, Instant Messenger, and discussion groups.  The expectations you set for your community on clear communication will save time and energy in the end.

If you’re a services executive at a product company, and you sell through channel partners, then I have a story for you. 

See if this sounds familiar.

A friend of mine in Austin, TX started a candle manufacturing company.  A few years ago, after he had just started the company, I stopped by his house to say hello and see how things were going.

When I showed up at his house, it became apparent that his little candle company was growing and doing well.  The funny thing is, he was still making candles in his kitchen, his spare bedroom, his garage and everywhere in between.  Plus, he had a 2-ton blob of wax sitting in his driveway.
Amazing.

Then, one day, his products got picked up by Oprah on her now famous “O List”.  Oprah featured his candles on her TV show and in her magazine.  To no surprise, his sales skyrocketed.  And, needless to say, he’s not making candles in his kitchen anymore.

In fact, he’s making thousands of candles in a huge warehouse and manufacturing facility now.  Every time I check in, it seems like he’s moving to another bigger facility.

One day, his accountant and staff told him that in order to run the business, he needed to upgrade to an Enterprise Resource Planning (ERP) system that would take care of sales, inventory, production and shipping all in one package.  So, he chooses one.

He called the ERP software company who educated him on the product and sold him on the benefits of their software.  But, they told him, they don’t sell direct to small businesses, so he’ll have to buy the products and arrange for installation through a local systems integrator and reseller.

Not knowing where to turn to, the ERP software company set him up with a local channel partner who claimed expertise in selling and installing ERP software for small, growing businesses just like his.

They send him a quote:

• ERP Software = $32,000
• Installation Services = $39,000 (For 5 Weeks of Services)
• Total Cost = $71,000

That was February 2007.  Nearly two years later, the ERP software is still not totally up and completely functional.  And basic features, like credit card processing, have never worked in the two years since the purchase.

Even worse, after nearly two years of “Be-Backs”, re-do’s and revisits, the channel partner has charged him over $150,000 for the services alone - more than $111,000 and 22 months longer than what was promised in his contract.

Now, instead of using great technology to spread joy to candle lovers all over the world, his technology is using him.  It’s consuming his and his staff’s time and energy.  It’s incredibly distracting to the business.

And, quite frankly, he’s fed up.  In fact, I can’t believe he’s lasted this long. 

Not to mention, he’s incredibly upset (that’s a euphemism for the words he actually used which I can’t repeat here).  Who could blame him?

But who is he upset with?  The channel partner?  No way.

He’s upset with the ERP software company.  In fact he’s so upset that he wants to return the product, sue them and start a blog to rage against the ERP software machine.

All because of a poor installation performed by a partner.  A certified partner, no less.

Now, this might not be happening at your organization, but I actually see this kind of situation being played out over and over again.  Why?

Two reasons:

1. Most channel partners fail at short term, packaged or transactional services (like in this case).  This is the hardest part of the services business to execute consistently and profitably and in a way that leaves customers with a positive customer experience.  And, we all know, when the customer experience is bad, they are no longer loyal to your company’s products.

2. Channel partners make more money on services and not so much on product sales.  So they’re incentivized to create long term, repeatable streams of service revenue through consulting projects, onsite residencies and outsourcing.  They are not incentivized to perform short term product installs because it’s not that profitable for them and it chews up their valuable consultants’ time.

So what’s the solution to this dilemma? 

Call me crazy, but I think about this problem, and customer experiences like Robert’s, non-stop every single day. 

You see, I have a dream that, one day, we will eliminate the pain, frustration and disappointment that customers experience when buying and installing complex technology products. 

Think, for a moment, about why small businesses buy your products in the first place.  If it’s a bank, they’re buying your technology products to more effectively grow and protect the financial assets of their customers. 

If it’s a school, they’re buying your technology products to educate our children and improve the future of this nation.  If it’s a hospital, they’re buying your technology products to save lives.

Yet, all too often, the technology products we thought were going to make our lives better, instead end up dragging us down and consuming our precious time and creative energies.  Instead of using technology to make our lives better, the technology products we buy are using us.

As services leaders, we must come together to rewrite the future of IT services by making it fast and easy for small businesses, just like Robert’s, to buy and deploy complex technology products - exactly the way it should be. 
We must unleash the power and potential of complex technology products - products that improve lives and help us realize our dreams. 

We must fulfill the real promise of technology so that small businesses can use innovative products and services to focus on the things that are most important to them.  Let’s let them get back to business.

If there’s a call to action, it’s this:  Take Back Your Customer Experience! 

We all know that channel partners are very important to product companies to drive product sales.  But at the end of the day, the end user customer wants to be loyal to your products. 

So, if you have channel partners that do a poor job at installation, step in and fix it as soon as possible.

Here’s how.

Create and execute programs that make it easy for your Tier 2 and Tier 3 channel partners to sell and install your products.  Here’s what I mean by this.

Like most product companies, you probably segment your channel partners into three groups.  And, regardless of what you call them, they probably look something like this:

• Tier 1 - Big and capable partners who have the means and motive to sell and install your products. 

• Tier 2 - Mid-sized partners who have strong sales capacity but only limited capabilities or resources to install your products.
  

• Tier 3 - Small-sized partners who resell your products but have very limited to no capabilities to install your products. 

Most product companies spend most of their time and resources capturing and holding the mindshare of the 600 - 700 Tier 1 channel partners.  That’s great.  Don’t stop doing that.  In fact, I encourage you to continue to grow and expand your Tier 1 partners.

However, more often than not, product companies can’t afford to invest the same amount of people and resources with their Tier 2 and Tier 3 partners.  Why? Because there are tens of thousands of these partners in the channel that can sell your products.  Product companies can’t afford to invest in training and supporting this large, fragmented channel segment even though this is where most of the channel sales come from.

But these partners desperately need your help.  Left to their own devices, these channel partners are probably not going to make significant investments in training or certification to get better at installing your products - especially in this economic climate. 

So, product companies who invest in programs to make it easier for their Tier 2 and Tier 3 channel partners to sell and install their products are going to win their unfair share of the mindshare of these partners.  And, by doing so, they’re going to win more market share across their product portfolio.

At least that’s my dream. 

Let’s change the story.  Let’s eliminate the pain and frustration small businesses feel when buying you installing your products. 

And let’s let Robert get back to the business of spreading joy and happiness throughout Candle Land. 

One of my favorite contributions in the book Tips from the Trenches: The Collective Wisdom of Over 100 Professional Services Leaders is Tip #54 by Matt Jacobson. Matt starts by saying:

”Blame it all on Sales - That usually doesn’t work so you better keep reading!”

I smile every time I think about that tip. He’s referring, of course, to the challenge of building teamwork and mutual trust between the Professional Services and Sales Organizations. And while a section of the chapter that is dedicated to Services Selling is excellent for helping increase PS Sales, we need to dig deeper if we want to find ways to improve teamwork.

My best lessons in working with Sales have come directly from Sales professionals themselves. Some of the lessons I’ve learned may not be immediately obvious. Some may be counter-intuitive. In this article I’ll share a few of those lessons, which can be implemented virtually overnight, and which should greatly improve trust between your PS and Sales organizations.

1. Don’t police Sales: It’s not your job, and it creates a lack of trust between the Services and Sales organizations. Handle concerns openly with sales management, and avoid sounding punitive. If you’re sincerely concerned about elements of a deal (such as pricing or schedule) ask for a joint review by Sales and PS Management, or by Executive Management if needed. Enter the review as a team, not as two competing parties. You’ll get your concerns heard without eroding the trust factor.

2. Communicate, Communicate, Communicate: This is a golden rule, but one that PS often breaks. ALWAYS let Sales know when you’re talking directly with an account. For standard project communications, regular status reports to Sales are critical. For out-of-band discussions, invite Sales to the call, cc them on email, or send Sales a summary of discussions. Lack of communication between PS and Sales can be ruinous to the relationship and has often led to some of the most impressive account escalations ("train wrecks”, “fire drills") that I’ve witnessed. Make this form of communication a cultural aspect of your organization.

3. Root for your team: Regardless of how much work the final deal may create for you, let Sales know that you want them to win. Emphasize the benefits to you and your company of closing the business. Your support does two things: it increases confidence in the Sales team, while building trust. When that happens, be prepared for a surprising twist: you may be asked how to improve the deal for services.

4. Congratulate the winner: One CFO I worked with would always place a call to the salesperson after a deal was signed. He’d personally thank them. That call was like winning an Oscar - it did more for building self-esteem than most other things we tried. I like to do the same (but I confess to using email more than phone). For a salesperson working remotely, you can really make their day by placing a brief call to congratulate them on a good win. Your call will demonstrate your value for their work, and in return you’ll create more open communications.

5. Make the Sales request a priority: When you’re assigned work for a Sales opportunity, view it as a project. Then schedule it into your day along with your other services projects. Let Sales know your schedule so they can see you’re taking it seriously. Then stick to your schedule - treat the salesperson as you would a customer by being on time, and showing them that the deal is as important to you as it is to them.

6. Return their calls: Respond to an email request or voicemail within the same workday. Even if your response is that you’re booked today and need to get back later, acknowledge their request so as to show you’ve got the ball. Your call improves confidence in the PS organization and peace of mind for the time being.

7. Salespeople are your immediate customers: A truism of Sales is that if you’re not delivering to their needs, they’’l find a way to get it done without you. Frightening, isn’t it? Salespeople will almost always take the path of least resistance. And they’ll find their way to those in the company who will help them, such as Engineering, as their first option. If you see that happening, it’s a good sign that you need to review your service approach to Sales.

8. Ask Sales how you can help: When you see an account raising challenges, offer to help and be willing to get directly involved with the prospect during the sales process. You’ll help lift the burden from Sales and you’ll show that you’re part of the team.

In the next article on Working with Sales, I’ll review the types of PS activities that can exceed expectations and create excitement within your company. Hopefully, you’ll find these lessons useful. Feel free to contact me to share your thoughts.

Sincerely,

Joe Longo
VP Professional Services
MetricStream, Inc.

According to TechCrunch’s Layoff Tracker, nearly 120,000 employees in the tech sector have lost their jobs since August 27, 2008. And the number is growing.  As a result of the current economic climate, many Professional Services Leaders who once considered their jobs safe are now finding themselves back in the job market. It’s an uphill slog to be sure, with few open slots and many experienced candidates dusting off their resumes and targeting the next opportunity. Not only is it a buyer’s market but competition among world-class candidates is fierce. With this in mind, I was recently asked to consider the following: In order to differentiate ourselves in the job market, can we package and sell ourselves in the same way that organizations sell a product or service? Is it possible to architect and execute a sales campaign for ourselves?  Can we in effect sell “Corporate Me” into the career market?

My job as a Consultant to Sales Organizations is to help my clients run successful sales campaigns; to open new markets and to find them new customers.  My work generally focuses on organizations that have run a number of unsuccessful lead generation campaigns, lack processes needed to be successful, and are looking for a better way forward. The programs that I offer navigate the pitfalls that inhibit the success of many go-to-market campaigns. Can these programs also work for someone looking for the next career opportunity?

The job search can be gut wrenching:  You contact your network, call recruiters, send out your resume and then (apart from the truly exceptional or lucky candidates), wait and hope for the call, for the interview, or for the job offer.  Frankly, it is a lot like sales cold-calling; digging around to get a sales cycle started. You usually have to face a lot of rejection before success; it’s disheartening!

Yet the best sales professionals don’t just sit around and wait and hope; they don’t get discouraged by rejection. They have a plan, a process and a clear understanding of how to attain their quota. Rejection is built into their plan. Rejection is all part of the sales process, and as such it’s both normal and commonplace, so don’t let it set you back. Top sales people will tell you that a call not returned, an opportunity that dead-ends, or even an outright “no” from a prospect is just one step closer to getting to a “yes” and winning a deal! So let’s look at the eight key elements of a sales campaign and see how they can be used to market the Corporate Me.

1.  Set Expectations at the Beginning of Your Job Search

The very first thing I do when working with a client is to get all the stakeholders’ expectations nailed down, documented and agreed upon by all. The Corporate Me should do the same. Document the types of positions you are considering. Review the risks and rewards and the expected return on your personal investment. Then work with your stakeholders to define an agreed set of goals and objectives.  You may, for example, be willing to take on a project that would mean moving to Dubai for a year; but are your stakeholders, in this case your family, on board with the plan?  Are they as willing as you are to move for a new position?  Things like documenting your salary expectations, maximum commute time and the types of positions you are willing to accept are key to keeping you from leaping at the first job that comes along.  Your expectation report will minimize the risk of accepting a job that’s a poor fit so that you’re not back in the job market again six months later.

Your “Stakeholder Expectation Report” will set the direction that you take in your job search. It will be the tool you use to monitor and manage your progress. Your goals may change as the search progresses, so you may need to revise your expectations from time to time. But to get the job search started, your Expectation Report is the foundation of your plan; from this you will build your job search roadmap.

2.  Know Your Unique Selling Proposition

Going to market with a so-so value proposition will ultimately lead to so-so results. Yet many companies launch sales campaigns with nothing more than glossy literature. To be successful, a company must identify its unique value and communicate that to its prospects and clients. Remember, though, that a unique selling proposition is not found in the latest technology, corporate IP, or even the best service and support staff; it can only exist if these products and services help solve a client’s business problem. Many companies forget this. Seduced by the prowess of their technology or their staff they believe that the product or service will sell itself. It rarely does. Superb technology and outstanding people may well give a company a unique proposition, but it does not become a unique selling proposition until someone is willing to pay for it. Don’t fall into the same trap.

Your 25 years implementing financials systems, or having successfully managed huge change management projects for Fortune 500 companies may make you unique (or at least somewhat special), but it only becomes a unique selling proposition if someone is willing to pay for it.

I know a salesperson who was recently hired within 45 minutes of being interviewed by her future manager. Sarah had a written offer in her hand before she left the building. She was a strong salesperson for sure, with a demonstrated track record; but so too were all the other candidates interviewing for the same position. What did Sarah do that set her apart?  She personally took to market what the company was looking to buy. The company, a systems integrator, was planning to jump-start an Oracle implementation practice. They had tried many times in the past to build a robust Oracle presence in North America only to see small market gains lead nowhere. Sarah knew this, and in the interview process explained how she could build market share and win new customers in the coming 12 months.

Sarah’s hiring manager told me that while all the other candidates talked about what they had done in the past, Sarah focused on what she would do in the future. Other candidates focused on their unique propositions; Sarah presented a unique selling proposition that the company bought on the spot. Using your resume, no matter how impressive it is, to lead the job search is like driving by using the rearview mirror. You give your prospective employee a great view of where you’ve been, but little indication of where you’re going.

3.  Articulate Your Value - Sell Yourself

When working with clients to build unique selling propositions I rely on the time-proven industry pain sheets. For those of you who’ve never come across pain sheets let me expand a little. Have you ever sat through a presentation where the sales executive blindly (and often self-indulgently) launches into a presentation or a sales pitch on the virtues of his product? Did you ever get the feeling that the presentation had been given a hundred times before? The presentations are often slick and fast-pitched; but unless they are relevant to you, they can be annoying and sometimes painful to watch. Pain sheets are designed to help generate a more productive and consultative sales cycle: One that seeks to diagnose a client’s pains before prescribing a solution. Essentially, a good sales cycle always starts from the customer’s position and the business problems to be solved. Pain sheets coach the sales exec to stay customer-focused and drive the consultative sales process.

The key components of a pain sheet are:

1. A business pain a prospect or client is experiencing
2. The reason for that pain
3. The impact that pain has on the organization
4. The solution the client is looking for
5. How you can help provide that solution

The husband of one of my colleagues, Jake, recently landed a prized job running web-based marketing for a vacation resort in the Northeast. When you hear his story about how he landed the job, it’s not surprising that he left the other candidates at the starting gate. He did a well thought out and well planned job of articulating his unique selling proposition. First he researched his “prospect”, understood its immediate business issues and came to the interview prepared to win the deal. Jake discovered that the company was looking to attract more customers through its website, and that they had not been successful in doing so in the past. Using statistics he’d pulled from his past projects, he demonstrated how he could build a web-based marketing presence that would generate new business for the resort. Jake didn’t feel like he was going through an interview; it was more like the type of sales pitch he was accustomed to giving to customers. In preparation for his interview he actually built a sample website to show how it could be designed and tailored to attract more guests to the resort. Did he use his resume? Well, yes but that was also presented as a website rather than a few pieces of paper stapled together.

By linking his experience and skills to a business problem, Jake created a unique selling proposition. By demonstrating how he could solve the problem, Jake had articulated his selling proposition in terms that resonated with his potential employer. Jake simply followed the fundamentals of a successful sales campaign by hitting all the key points of a pain sheet. He recently relocated to Vermont where he is now the Director of Web-based Marketing at the resort!

4.  Perfect Your Elevator Pitch

Just as you would in any sales campaign, the Corporate Me should also have an elevator pitch; something that enables you to describe your value in 30 seconds or less! For the sales campaigns I run, I have my clients build an elevator pitch, cold call script, reference story and sales pitch, all from the pain sheets. 
Here’s a real life example. Sally works for a professional services organization where she designs and runs their training programs for new hires. Using the components mentioned above, let’s build a pain sheet for Sally:

Pain - When the company hires a new recruit, it can take weeks before he or she is trained enough to take a productive role on a billable project.

Reason - To come up to speed, a new recruit needs to learn many things, from corporate policy to project tracking to expense management. This is sometimes a hit-or-miss activity, with some managers working well with new hires and others doing nothing at all.

Impact - Poor training has a negative impact on the morale of the new hire, and it delays the time it takes to get consultants on revenue earning projects.

Solution - Wouldn’t it be nice if we could have a central training program for all new hires and have them ready to work on clients’ projects within two weeks of their start date?

Using the pain sheet as a foundation, Sally’s elevator pitch might be: “I’m in the business of helping my company save costs and eliminate the frustrations experienced with hiring new recruits. Getting new hires up to speed can be an incredibly time-consuming, frustrating and wasteful activity. To solve that problem, I design and run targeted on-boarding programs that enable new recruits to be productively employed on billable projects within two weeks of joining the company. Each course I run saves my company thousands of dollars and improves the morale of our new employees.”

Doesn’t that sound better than: “Well, I run the training programs for new hires at my company”?

5.  Generate a Prospect Database

Fundamental to any marketing campaign is a good prospect data base. The prospect database needs to be both accurate and appropriate. Accurate because you need to ensure that information about the companies, contacts, phone numbers and emails are correct. Appropriate because you need to ensure that the target companies are interested in the product and services you offer. There’s no use pitching a solution to a company that doesn’t have a problem you can solve. The same is true with the job search; you need to sell to companies that want to buy what you have.

Using your “Stakeholder Expectation” document and the articulation of your unique selling proposition you can start building a list of prospect companies. Your stakeholder expectations may say something like: “I want to work for companies located within 50 miles of my home in San Jose, the company must have greater the $100 million in revenues and I want to be hired in at a vice president level.” With that you can start to build a prospect list. The work that you’ve done to articulate your unique selling proposition will help you refine the list. Sally, for example, would want to target companies that are having issues training new hires.

Next rank your prospect database into A, B and C lists. The A’s are the low-hanging fruit, these could be organizations associated with your professional network and close contacts. The B’s will be the next group of organizations, those who could benefit most from your unique selling proposition. And the C’s are the rest. Now it’s time to start reaching out…

6.  Build a Funnel - Dialing for Dollars!

Sales is a numbers game - the more leads you have the greater the chance of closing a deal. Successful sales professionals know that they must actively manage their sales funnels to ensure that they not only meet but beat their quotas. It’s called a sales funnel because it’s just that, wide at the top and narrow at the bottom. You need to constantly fill the top of the funnel in order to ensure a flow of opportunities to the bottom. 

Landing a job is just like a sales win, so you’ll need to start building a job funnel from your prospect database, and you’ll need to do it in a systematic way. Suppose for each job opening, organizations will interview an average of five candidates from a pool of applicants.  With your unique selling proposition you should get the job, but put that aside for the moment. All things being equal you have a one-in-five chance of getting the job once you get into the interview room.  Getting an interview is another story. One recruiter recently told me that in today’s environment, it could take 20 applications to get just one interview. Do the math; based on these figures you’lll need to prospect 100 opportunities to land your next job. 

In his book “Cold Calling Techniques” Stephen Schiffman describes how the sales funnel works. To make his quota he needed to make fifteen cold calls a day. That was seventy-five calls a week. From those seventy-five calls Schiffman was able to get five face-to-face appointments. And from five meetings he could close one deal. Schiffman figured out that to meet his quota, he needed one new sale each week. So through hell and high water, he called seventy-five new contacts every week. Rejection was factored into the formula: seventy-four calls went nowhere. It wasn’t personal; it was just a fact of life. But as Schiffman worked through all those rejections, he knew that he was one step closer to closing a deal. That’s the way it works.

For the job seeker, Schiffman’s numbers may be a bit excessive, but you get the idea. After 16 years working for a large Silicon Valley software company, Margo was suddenly let go. Although the termination was part of a cost-cutting effort by the company, it still came as a complete surprise to her. The biggest impact on Margo was not the loss of salary or benefits; it was the sudden, unexpected inactivity and lack of structure after years in the corporate whirlpool. “The idea of not being needed, of not getting up and logging into email was tough,” she told me.

“I had always thought that I would enjoy my leisure time, but the emptiness was oppressive. So I made up my mind to make 10 calls every day, Monday through Friday. After the calls were done, then the rest of the day was mine. I knew that most of the inquiries I made would never get a response, but I was prepared for that because I knew that the next day I would make 10 more calls and 10 more the day after that. In a sense, I gained back a bit of structure and started to control my own destiny.”

7.  Sell the Corporate Me

Nick, a good friend of mine, recently started his new job with a global consulting company.  As an experienced consultant, he saw the whole interview process as a sales cycle right from the very beginning. He told me of one situation in which he was asked to upload his resume to a corporate recruiter, something you find to be typical of the Monster.com or Hotjobs process.  And as soon as he hit the upload key, Nick felt as if he had lost control of the whole process. His instincts told him that he would never hear back from the company unless he was able to speak with the hiring manager. He called the company. “At first they didn’t want to talk with me. They said it was out of process.  So I told them that just as they needed to learn about job applicants, so I wanted to know about them. I started asking a few well-researched questions and 30 minutes later, the H/R Director walked my resume over to the president of the company. There’s really no point just sending in a resume and hoping for the best. You have to assume some level of control.”

When he landed the job interview he was prepared. Nick recalls, “I researched the company’s pain points. They had great delivery capabilities, but were anonymous in the market place. They had no branding so I explained what I could do for them.”

Before the interview Nick researched and was prepared to answer the same questions that he used whenever meeting with his clients:

1. What is the point of the meeting?
2. Why should the client care?
3. Why should the client care now?
4. Why should the client listen to me?

Nick believes that if he hadn’t run his job hunt like a sales cycle, he would probably still be looking today.

8.  Push for the Close

Rob Friedlander has years of experience as a corporate recruiter. He’s worked with Mercury, Bearingpoint and Gartner and managed the process of hiring thousands of candidates in his career. “Those who get hired,” Rob says, “are the candidates who treat the interview as a sales call, whether or not they are interviewing for a sales position”. A candidate who wants to get to the next round of interviews must ask probing questions and express their value proposition. Rob points out that long gone are the days when you can come to an interview and see it as an information-gathering session. You need to be intensely prepared to understand what the hiring company is looking for and craft your background skills to meet those needs. Then you need to close. The candidates that advance to the next round of interviews are often those who push for a close with questions such as: “Is there anything that you see that will prevent me from getting this job?” or “Are there any concerns that you have that I could address?” or “I’m keen to move forward; what are the next steps?”

In all his years of hiring, Rob says there is one candidate who truly stands out. Some time ago, Rob’s company was looking for someone to support a large software account. The candidate came to the interview equipped with an action plan for the next 30, 60 and 90 days with action items, names of individuals to meet and the goals that would be achieved. Needless to say, he was hired and proved to be a great success in his new role.

Conclusion

For those of you looking for employment, let me wish you all the best. In my own profession I find that if you build a firm foundation of value and articulate that value in a manner that resonates with a prospect organization, and then systematically seek those organizations that can best benefit from the value that you can provide makes all the difference between a mediocre sales campaign and a real winner. Being part of the PSVillage community means that you are already an experienced professional with a lot to offer your next employer. For those of you in the job market, grab a piece of paper and a pen and start working on your stakeholder expectations, work with colleagues or friends to craft your unique selling proposition and get ready for your next, great employment adventure!

I am constantly asked by services leaders and sales executives what must be done to turn box pushers into effective services sales professionals.  Based upon my personal experience over 20 years, here is what it takes.

1. Begin at the Beginning
   Determine what level of overall strategic business importance your top executives place on services. Necessary evil? Nice to have revenue? Or critical to organization success? Finding the answer will shape your choices and frame what you can reasonably expect.

   Also, remember that a best practice* is to have everyone who touches the customer sell services. Don’t rely solely on the product organization to make your numbers. Definitely have (at least a few) dedicated services sellers, and think through the appropriate business development roles for your professional services providers. This gives you at least partial control over your destiny.

2. Focus on a Few Carefully select two or three services offerings based on the following criteria:
   1. They should be seen as immediately valuable to clients.
   2. Selling these services should be directly connected to selling more products.
   3. You should have a reasonable expectation of sales within 90 days.

   Good salespeople are interested in offerings that are good for their customers and good for themselves. Your selected services should deliver some early wins to demonstrate success and crank up motivation.

3. Package the Promise Make it as easy as possible to sell. Make the intangible, tangible by providing promotional support with:
   • Clearly defined features and benefits important to the customer.
   • A simple ROI calculator.
   • Testimonials from showcase accounts lauding the business impact of the services.
   • Testimonials from respected product salespeople explaining the benefits of selling the services.

   Talk all you want, but salespeople listen best to respected customers and respected salespeople.

4. Adjust the Appeal Change the performance management system to make selling professional services very appealing. Build professional services into expectations and quotas. Make hitting professional services selling targets lucrative (you can scale down later), and put negative consequences in place if professional services selling goals are not met. (No trip to the Bahamas for the services slackers.)

5. Target the Training Put everybody through high-quality, services-specific sales training. SPIN Selling, Professional Selling Skills, Strategic Selling, etc. are all good basic primers for box sellers, but they don’t cut the mustard when selling the invisible. Find some services experts with training competence and tailor a program specific to the needs of your organization. Make certain that components such as these are a part of the curriculum: How to Sell Intangibles, Qualifying Great Services Business, Developing Services Power Maps, Selling Services to the “C” Level, etc.

6. Reinforce the Routine Provide ongoing reinforcement. Behavior change takes time and support. Be prepared to put some time and money into it. Back up the sales training with reinforcement workshops every 60 days to let people share successes and practice new skills in safe environments. Keep an electronic classroom going to allow for “ask the expert” dialogue and sharing of war stories. Invest the money to provide in-field coaching by people skilled in both services selling and one-on-one coaching to build both competence and confidence.

7. Realize the Reality Keep in mind two important realities:
   
   1. Some folks are just wired differently. Even if you follow all of the above guidelines, about one in three product salespeople will not be successful in selling services. (Hey, it’s not their fault-they were hired to sell boxes.) You should understand this from the beginning and be prepared to do one of the following:
      • Accept it and do nothing,
      • Use sales teams rather than relying on individual efforts, or…
      • Help these individuals find new jobs inside (or outside) the company.
   2. Things usually get worse before they get better. You will need to stick to your guns. Overall sales will go down before they go up. People will resist and test how serious you are. Expect that you’ll get “feedback” that isn’t always positive.
      

--------------------

Jim Alexander is founder of Alexander Consulting, a management consultancy that creates and implements professional services strategies for product companies. Contact him at 239-283-7400, alex@alexanderstrategists.com, or visit http://www.alexanderstrategists.com.

©Alexander Consulting

With the economic winter affecting all areas of business, it may seem like a time for consultants to hibernate.  Now, however, is the time to engage your clients, maintain communication, and perhaps be ready to assist as a consultant in new ways (a topic to be covered in more detail in my next article for PS Village).  And if you are a VAR or system integrator, you are still likely to be seen as the client’s primary source of product information and assistance, even if the client is purchasing less than in the past.(1) You can take advantage of today’s slower markets to prepare for the eventual upturn through enhanced client relationships. Leading consultants and providers of professional services increasingly rely on Web-based means to ensure direct conduits of continued dialogue with their customers.

Web-based interaction with your current customer base is the best way to keep your existing customers engaged with you and your company, even if you are one step removed from the direct sale or implementation of the product. Use of collaborative Web 2.0 technologies provides the means to maintain a vibrant “sticky” relationship with customers independent of channel path. For example:

• Communicate With Your Customers. Many PS firms provide customer-exclusive extranets for highly technical or roadmap conversations.  More recently, they have added blog sites that encourage customer participation, suggestions, and complaints to create a link between them and the customer.  Dialogues between you and your client base encourage the connections that keep customers coming back.  Intel may never sell a product directly to a consumer, but it directly engages them through communities that include developers, technology experts, and its own bloggers.  Intel uses the site to help generate demand, measure trends, and provide information to all its constituents. Extranets that provide customer specific information, those that address the specific needs of the reseller or SI channel, can well be supplemented with publically accessible “From the Community” blog posts. 

• Let Your Customers Talk. Support creation of forums on topics specifically interesting to groups within your client base. Forums support conversational threads on specific topics, likely of interest only to a subset of your customers.  Blogging customers and partners can form active Ning.com-like communities around topics and issues relevant to their industries and issues. Cadence, for example, developed nine specific Design Communities (mirroring the way their customers work) to support its users and technologists interacting to exchange ideas, news, technical information, and best practices to solve problems and get the most from Cadence technology.

• Know What Your Customers Want. You can maintain “touch” with your customers to find out what is driving them toward - or away from - the brands, products, or services they use, and if you deliver custom services or re-sell products, use your current customers for product innovation or ideas for new services. Collaborative tools such as Digg allow your customers to vote on enhancements for current products, add-on services, or suggest new ideas to your “idea factory.” If you have projects in place with customers, investigate Smart Sheet or Base Camp for collaboration or tools such as Acrobat Pro for further interaction.  Salesforce.com promotes its IdeaExchange as a way of gleaning customer feedback on enhancements - with over 8000 idea submissions that generated more than 17,000 comments from customers. Customer “votes” move items into prominent positions. Voting is a useful tool to ensure your proposed solutions actually addresses customer demand.

• Manage Up Your Demand Chain. If you sell or resell products, now is an excellent time to work more closely or collaboratively with the technical vendor community. Those companies have a vested interest in improving both the customer and partner experience indeed reaches through all your demand channels. Companies that create partner forums, encourage inter-partner communication, and actively accept feedback and act on it are best able to command ongoing partner loyalty - and they rely on your advice in best achieving those goals.

Dell, for one, launched its channel blog to help communicate the company’s partner strategy, and to interact more closely with solutions providers.(2) Companies that listen to their partners can lower the costs and increase the ease of installation.  This is turn can move the customer base to the most recent software revision faster - decreasing the support costs of multiple versions.  Partners are also the best source of tips on third party product integration - something the vendor itself may not know much about - and ease cost of reiterative integration for the customer.




RECOMMENDATIONS


To succeed and keep customers, professional service providers need to proactively communicate with them. Moreover, they need to listen to them and encourage inter-customer and inter-partner discussions.

• Use fresh multimedia content to keep your customers and prospects interested in your company and your solutions. Websites are a great source of information, even when it is only uni-directional. But sites get stale very fast: use new podcasts, videoclips, web seminars, current on-line newsletters specific for customers and partners, and access to new customer and industry-relevant research and reports to allow your company to become a trusted advisor to the customer - one to which he or she will return for further information in the future. Move to Web 2.0 tools to add multi-directional communication with all constituents.

• Make use of collaborative community websites. Engaging customers, prospects, and even your employees through social platforms for discussions is easy, cost effective, and help creates the transparency customers often look for in service providers they trust.

• Use wikis for mass collaboration. Create a wiki platform for engineers, partners, and customers to share in the collaboration that can increase the speed, scope, and success of innovation and business and technical solutions, and better prepare you for the recession’s end.

• Create a “voice” for your company. Companies have personalities just like people do.  Think about the image you want your company “persona” to project:  edgy, risk-free, dependable, cutting edge, etc. Use this “voice” for customer and channel communication, from an executive blog to the response to a community of end users. No matter what kind of personality you want to project, it should always be consistent, friendly, business-like and articulate.  And related to this, adopt a blog policy. Not every member of your company should be expounding on your good or perhaps not-so-good, points.(3)

• Measure results. Collect and maintain relationship analytics to measure your return on all your ongoing customer relationship activities. Track which methods best attract which customers, which lead to most future revenue, and which fail to create the traction you want.(4) Know if your customer retention grows because of a Salesforce.com-like IdeaExchange or your aftermarket sales increase from refined customer communities, such as Ning.com supports. And ask your clients for feed back as well.

Losing touch with your customers is a sure way of telling them you stopped caring about them - and a sure way to lose them. Establish vibrant communities of clients using modern Web 2.0 technologies. Ultimately, you can help yourself and your clients and retain those customers throughout the recession.

1. The very top solution providers alone cleared more than $377.66 billion worldwide gross collectively in 2007.  VARBUSINESS 500 2008. http://www.channelweb.com.

2. Five Goals for Dell Channel Blog Apr. 23rd, 2008 by The VAR Guy at TheVARguy.com

3. Each company should have a blog policy in the employee contract that suggests (you cannot demand) that feelings about the company expressed in personal blogs remain businesslike and never divulge proprietary information (this you can demand).  For all company-sanctioned blogs, require proofreading for spelling and typing errors that reflect badly on the company. 

4. See Emergent Metrics in The Interactive Marketing Metrics You Need. Rebecca Jennings.
   Forrester Research, May 29, 2008.

If you’re anything like me, you have a growing stack of “must-read” books on consulting, business leadership, personal success, misplaced cheese, and ancient Asian military philosophies - all piling up and waiting for your attention on the next available flight or sleepless night.  Then the question is, “OK, now that I have time to read something, which one do I pick?”

Well, I recently received an advance copy of Everyday Practices of Extraordinary Consultants by Christine Lambden and Casey Conner of Consulting Stance, and I would highly recommend that you consider moving it to the top of your list.  ‘Everyday Practices’ is a highly consumable, down-to-earth consulting guide that covers everything from simplifying your commute and managing personal disasters on company time, to honing communication skills and navigating ethical quandaries with integrity.

The purpose of the book, as stated by the authors is “to stand alone as a guide for new consultants, or to accompany classroom or group study workshops.” At QuickArrow, we deal with consulting managers and practice leaders every day, and one of the most common complaints we hear across all segments is how the conflicting demands of administrative, sales, and management tasks and fire drills always seem to get in the way of coaching and mentoring new consultants.  Then when something goes wrong on a project that can be traced back to poor instincts or a lack of training, you vow to standardize training for all new hires so that it won’t happen again.  But far too often, no one has the bandwidth (or the willingness) to pull together and document all of the “tribal knowledge” that your veterans have accrued over their combined decades of experience.  This book does just that.

Given the purpose of the book, some of the topics are predictable and seemingly basic, like presentation skills and travel tips for long-distance projects, but some are surprising and unexpected - like chapters on what questions to ask on your first day or how to confess when you are the one who broke the system.  Throughout the book, the authors include stories from their own years as traveling IT consultants, often with a tongue-in-cheek spin, and even some self-deprecating humor to illustrate the “how-not-to” scenarios.

And perhaps most importantly, unlike so many long, repetitious business books that rely on countless illustrations to drive home the message, the authors here opted in favor of one or two highly memorable examples for each point, and in doing so, created a book that can easily be read (or re-read) in an afternoon, without ever becoming monotonous, and brimming with practical lessons that consultants of any pedigree or experience can apply in their daily routines.

For many of you, there will be a lot of “basic common sense” in this book - and that’s exactly the point.  That said, the colorful illustrations can help cement concepts you’ve always known, and give you go-to references to help others understand them as well as you do.  For others newer to consulting, you’ll find advice you never dreamed you’d need, and save yourself a lot of unnecessary headaches as a result.

One of my favorite lines in the book is about managing expectations:  “If you only master one move in this book, make it this one.  Successful consulting is two parts setting expectations properly, and one part execution.” Much like the advice in Tips from the Trenches, this is the kind of thing that they don’t teach in schools.

This book is the training you would put together and the skills you would teach everyone on day one - if only you had time to do it.  So, whether you’re new to the industry and don’t want to repeat classic mistakes, or you’re a cagey veteran who just wants a reminder and validation of all the things you’ve learned over the years, I would highly recommend that you check it out at:
http://www.consultingstance.com/publications.htm.

A Guide to Building a Scalable PS Organization and Avoiding Burnout of Your Best People

Background

Through our work with clients, RTM Consulting has been able to analyze the utilization data of a variety of Consulting and Professional Service Organizations (PSOs) - both large and small.  In virtually every situation, we have seen that 10-20% of the population is 90% or more utilized.  In a number of cases, 5-10% of the population was over 100% utilized.  We all know that overtime and “going the distance” is part of the job, but in these cases, people were 100%+ utilized for a full year.  What makes matters worse, anywhere from 20-40% of the population was less than 60% utilized.

How does this happen?  Do these statements sound familiar?

Many PSOs start as small organizations.  In small organizations, PS executives hire “experts” or employees develop into experts by necessity as there is no one else around to do the job.  As the PSO grows, either organically or through acquisition, the same initial experts are still doing a majority of the work.  The organization is systematically either unable or unwilling to mint a new generation of experts.

This document will provide a guide to building a scalable PS organization.

Why is This a Problem?

Amazingly, many PSOs do not fully recognize the extent of this problem.  First of all, the problem is often masked at the executive level because:

1. Somehow the work keeps getting accomplished; and
2. Overall utilization is at or near the target for the organization.

1. The experts will eventually burn-out - and leave the organization; or
2. The organization will not be able to scale to meet expanding needs (which only serves to accelerate the first point).

Breaking the Subject Matter Expert Shortage Cycle

The problem of a Subject Matter Expert (SME) shortage is often seen as a classic “chicken and egg” problem:  an expert needs experience, but a resource cannot get experience without being an expert.  That is, Account Teams do not want to invest the funds required to staff a junior resource on the project, but the junior resource will not become an expert without real world field experience.

I contend that the decision does not need to be seen as an “either, or” problem.  Rather, by shifting their thinking to “developing” SMEs, PSO executives can break the SME shortage cycle.  There are three key steps that PSO executives can take:

• Deploy a Career Coaching Model;
• Launch Comprehensive Development Programs; and
• Employ Strategic Staffing Assignments.
  

Career Coaching Model

Many of the PSOs we have seen operate in the traditional command and control, top down organization structure.  Put more simply, each person on the organization chart works for the person that gives them their daily / weekly / monthly work tasks.  However, in this model, the employee’s supervisor is not always the “expert” in the topic area of the employee.  The supervisor is a supervisor. 

To be successful in grooming new SMEs, new members to the PS team need to have a mentor, a coach, a person they can call to get their questions answered.

They also need someone looking out for their future assignments, helping chart out a course of assignments that help them build the necessary skills.  Career Coaching is the foundation that provides the employee with a safe place to address their needs.

Comprehensive Development Programs

Training, Development, Knowledge Transfer.  Call it what you want, we all know it needs to be done.  However, we all rarely spend enough time, energy or money in this area.  Yet, it is so critical.  In our work doing Resource Management Diagnostics, a common refrain from most client organizations is that “We need more training.” These programs do not need to be expensive programs.  Rather, it can be:

• Self paced training that is taken after normal work hours;
• Access to a well organized knowledge base that is accessible electronically; or
• A message board that is governed by other experts in the organization.

The resources you have hired are smart, intelligent people.  Otherwise you would not have hired them.  You simply need to give them the access to tools, knowledge base, reference guides that will help them along the way.

Strategic Staffing

Of the three recommendations, this is likely the cheapest to implement and most productive in developing future experts.  As mentioned early in this paper, we often hear the refrain, “We need more experts.  I am willing to let some new employees shadow a project - but I’m not going to pay for them.” The problem is, someone needs to pay, but few PSOs allocate the budget for idle resources.

To address this need, we have seen successful PSOs leverage the staffing assignment process to build new experts.  As project needs are defined, they look at how to pair up more and less experienced resources.  This could involve:

• Pairing up two new developers with a more seasoned developer;
• Staffing a new / junior project manager on a team of seasoned architects and analysts; or
• Assigning an expert architect to three projects and giving the expert the leverage of three to four junior architects across those projects.

The list of permutations and combinations could go on.  The point is, by strategically staffing your teams you can create the opportunity to develop new experts.  You may be throwing new people into an uncomfortable environment, but you are also surrounding them with the additional support that they need to get the job done - and learn from the experience.

Closing

We have all seen heroic delivery.  Through the course of our progression up the PSO career ladder, we have likely exhibited some of these traits:  going above and beyond; working 70+ hour work weeks; making it happen.  These are all great traits in an individual - but difficult to scale in an organization.

Losing a hero can have a tremendous impact on a PSO.  PSO executives need to make their experts expendable - by developing more experts.  Developing people is a process and will take time; but, it’s better than the alternative of doing nothing and finding yourself without the right people.

About RTM Consulting

RTM Consulting, headquartered in Cincinnati, Ohio, provides strategic and operational advice to assist technology companies increase revenues and grow margins, by leveraging professional and consulting services more effectively.  Specializing in Global Resource Management and Professional Services Business Optimization, RTM Consulting helps IT hardware, software and pure consulting businesses achieve the benefits associated with a successful professional and consulting services portfolio.  With its unique Business Acceleration Services and focus on operational excellence, RTM Consulting helps large, medium and small firms move beyond theory to practical application of industry best practices and achievement of exceptional results in the shortest possible period of time.

© 2008 RTM Consulting, LLC.  All rights reserved.

As a long-time practitioner managing large-scale, service development teams for product companies, I can safely predict that a well produced service offering will help sell and consistently deliver quality solutions to customers. Business leaders want predictable profitability and to avoid the pain of problem escalations.  The Sales team wants services nicely packaged for quick sales.  And service organizations want a well-developed service offering that provides consistency and builds confidence for Product Managers, Field Consulting Managers, Customers and Sales Reps.  But the inherent challenge for many services teams is that the demand for services development often exceeds available resources. 

Service Development Models

Given this challenge, what type of development resourcing is most appropriate for a given service?  That depends largely on the maturity
of the service and expected sales volume.  In this article, we’ll explore three different service development models, outlining the pros and
cons of each as well as the effectiveness given the maturity of the service:

1. Geographic Service Development
2. Centralized Corporate Service Development
3. Central Leadership with Distributed Manpower (including off-shoring)
   

Geographic Service Development Model

Chartering each geographic P&L to build its own services can be attractive because it keeps the decision making close to the market
and reduces corporate overhead.  But the downside to this model is that there is no economy of scale because different geographies
often develop redundant materials.  Additionally, the time-to-service maturity and consistency is long because of the difficulty of
blending the tempo of operational delivery with the focused thinking required for development. Field resources are busy billing and
don’t have consistent and focused chunks of time to complete the project.  In practice, the typical learning done in each geography
is passed along through on-the-job (OJT) training and little information is documented.  Not surprisingly, undocumented intellectual
property is very difficult to share.

Another disadvantage of using domestic field resources is the high demand for doing billable work.  Field resources are often unable
to dedicate a solid block of time to complete the development work.  It also results in consultants attempting to complete tasks after
having been at a customer site all day, trying to squeeze in a few hours at the hotel after dinner and catching up on emails.  This
after-hours work makes coordinating with technical writers a challenge.  And when it becomes necessary to use other field resources
for peer review, this coordination becomes even more difficult.  The resulting long cycle times can greatly diminish the value of the
information by the time it finally gets published.  If service documents for a new product take three months to develop, multiple
geographies will already have spent the time and effort figuring out how to make it work. The net result is that documents published
after this time may well go unread.

Like a shanty town made of salvaged materials, an ad hoc geographic service development program can create a chaotic environment
with non-repeatable processes. Planned development with a combination of local and specialized skills produces a more robust and
presentable result.

Centralized Corporate Service Development Model

Just like Field Managers want service delivery documents that can bring new consultants up-to-speed fast on high volume services,
Product Managers need to get delivery capability up-to-speed fast for high-growth products. With the launch of new products,
time-to-market for the service documents is critical.  In fact, time is so critical that service development and consultant training are
often attempted at the same time. The question is should corporate invest in the service development activities, or will the field do
it driven out of its own economic self-interests?

A low sales volume service is not going to provide an acceptable ROI when looked at purely from a services ROI perspective.  Thus,
if left to the geo. service leaders who have incentive goals on local service revenue and profitability, a new strategic product will
suffer from lack of development in advance of revenue.  This will in turn lead to lack of confidence among the risk-adverse
consultants and sales representatives who should be pushing the new product.  For a low sales volume product that is experiencing
growing pains, and doesn’t have the luxury of waiting for field-driven development, a dedicated central corporate development team
is an alternative worth considering.

This investment of service development ahead of revenue can be done with centralized corporate services development.  Not only can
the company insure the development happens, but the resource can be protected from operation distractions to shorten the time to
generate the materials.  Centralized development also best enables consistency of packaging and brand image. Alas, this model is not
right for all services, because there is still a sequential step required to transfer knowledge and train the field resources.  To further
shorten time-to-market, combining some of the development and field consultant training can save weeks.

Central Leadership with Distributed Manpower Model

Timely and 100% complete development requires at least some centralized project management.  Centralized management keeps
things moving, helps navigate the content through proper distribution channels, and enables the creation of professional looking and
consistent documentation.  If documents distributed to consultants are not consistent, output to customers will vary in both quality and
appearance - resulting in poor brand image.

In addition to a Project Manager, a corporate technical resource can debug a new product in a lab environment so field consultants can
rapidly get hands-on experience and contribute useful content to the development effort. There is no substitute for hands-on experience
to give a technical resource confidence in a new product’s strengths and weaknesses.  The field consultant will take that confidence back
to his geo. with him.  This condensed lab effort reduces the Field Manager’s development opportunity cost in billable hours, and gives him
a local resource to help him avoid engagements vulnerable to a product’s unspoken weaknesses.  That awareness decreases fear of the
unknown in the field, and accelerates new product sales.

To get the most benefit from this distributed development model, experts from different geographies should be brought into play with the
new product about the time of product General Availability (GA).  A technical corporate developer is assigned to set up a lab environment.
The corporate and geo. experts can then spend a week or two together in the lab and reach a critical mass of rapid product learning and
service development. It is also prudent to have one person at corporate who “owns” the technical aspects of the service for continuity and
possible escalations. The corporate developer is that steward for getting all the jointly developed lab learnings quickly integrated and sees
that they are professionally packaged and distributed globally.

One of the main benefits of this distributed model is the field buy-in to materials developed.  The discussion of development priorities and
quality then changes from “corporate supplier” versus “field consumer” to become a collaborative team effort.  Thus, this development
environment encourages the sharing of information and minimizes finger-pointing.

Service Maintenance

So that is all well and good for new service development, but what about service maintenance?

The advantages of using on-shore, internal field resources for service maintenance include quicker time-to-market and the safeguarding
of intellectual property because it stays in-house.  In addition, the content is more valuable because it is developed by people who
understand the context of your main market.  However, as previously mentioned, often the field resources are too busy to help. 

So how do you stretch your limited central resources, particularly if the field isn’t motivated to help with service maintenance?
One answer is outsourcing to a country where talent costs are significantly lower.

Off-Shoring Development Tasks for Mature Services

Off-shoring to low-cost countries is well established as a viable way to reduce costs for product development and customer support. 
Though often overlooked for this type of work, it is a cost-effective way to reduce a company’s service development backlog, too. 
This strategy is no for every company or even every service offering. 

A corporate service developer can typically handle multiple products. However, to most efficiently multitask, managers can help shield
key developers from the minutia of minor product upgrades.  For mature services some development outsourcing is an option.  If the
product has been in the market for a while, there is probably already a sizable pool of consultants who have experience with it.  This
opens the possibility of outsourcing some development activities to the geos. or external companies.  Let’s discuss the type of work that
makes a good candidate for overseas development outsourcing, and how to ensure its success. 

One of the common arguments for outsourcing product development is that for the same money you’d pay in the U.S.A., you can hire
two to three developers for months at a time in low-cost countries and work them in parallel.  While these product developers might not
be as productive individually, assigning parallel development tasks can help to reduce total development duration. Unfortunately, service development for common enterprise class IT products often is not suited to extended multi-threading.  Beyond a week or two burst of joint
lab development with some field experts, most of the work will be done by a single lead technical developer.  This single thread nature makes
it impractical to use low-cost offshore developers in parallel for very time sensitive, pioneering, new service development.  However there is
viable case for using offshore developers on periodic service updates.

Once a product is mature and the field has sufficient capacity to deliver, the associated service skills become more widely available.  Product
adoption may have moved from adoption leaders in first world countries to later adopters in low-cost developing countries.  At this point there
exists a low-cost pool of potential developers with core product knowledge.  All you have to do is get them up to date on the new product
features.  This can be done in one of two ways: send them the new version of software and let them figure it out or bring them to the home
country to field shadow or use lab resources.  The in-country research needed for doing best practices service updates can be done by a
foreign consultant holding a B1 visa, as long as a few guidelines are followed.

Visa Guidelines

Bringing in foreign consultants requires that you pay close attention to the visa laws.  A B1, or visitor visa, allows a company to bring in
foreign consultants for training and research.  B1s are much easier to obtain than an H1B visa.  Below are some distinctions between the
B1 and H1B visas*.

While in the US as a business visitor with a B1 Visa, an individual may:

• Attend Meetings, and participate in them fully. 
• Interview staff.
• Conduct research.

The following activities require an H1B working visa, and may not be carried out by business visitors:

• Gainful employment.
• Payment by an organization within the US.

In practice, legal council has recommended that the B1 consultant can go along with billable consultants and take notes, as long as the
customer is not billed for the B1 holder’s time, and the foreign consultant keeps his hands off of the customer’s keyboard.  This note
taking is considered research.  The B1 visa holder can watch your field consultant doing the work and redline old service documents
with areas for updates.  Thus the field consultant is not burdened with updating documents and the foreign consultant can conduct
research on best practices.  After being on-site doing research, the foreign consultant can return home and finalize draft documents
and engage with technical writers.  Dedicated time from this low-cost resource saves both development cycle time and labor costs.

How do you best support the foreign consultant with technical writing?  The follow-the-sun strategy with technical writers is not ideal
because of the amount of interaction often required between the technical writer and subject matter expert.  These questions often
can not be planned in advance and the back-and-forth via email can add enough delay and interruptions that task switching costs
become prohibitive.  Ideally, technical writers and the technical leads should be in the same general time zone.  For best results,
provide remote technical writers with established document format templates to make the requirements for the final documents clear.

Program Management should remain in the home country.  A lot of the effort of services development is organizing the resources and
pushing the final deliverable out to the end-users.  The knowledge of who to contact to get things done as processes and systems are
changed is best done by an internal Project Manager who knows unwritten rules and the critical path.  For quality assurance, the externally developed documents can be Beta tested by internal field resources or redlined by SMEs.

In Conclusion

What type of development staffing is most appropriate for a particular service?  The answer depends on the maturity of the service and
expected volume.  If working with a strategic new product that is still suffering growing pains and likely to be low volume, your best bet
is to do centralized development.  This avoids a new product suffering from lack of development in advance of significant service revenue.
For higher volume and more mature services, a service distributed development program that blends corporate program management and
corporate technical leadership can create a broad range of new and maintenance updates.  The distributed development model can leverage
experts in both domestic and low-cost countries. 

The good news is that both centralized and distributed development can easily co-exist in the same service development program.  This
serves a broad range of internal customers from Product Managers trying to get new products ramped up fast, to field consultants who
just need up-to-date mature service documents.  PS leaders need these options more now than ever as companies try to simultaneously
minimize costs and position new solutions to gain market share as the economy recovers. 

© 2008

"It was the best of times, it was the worst of times ...”

Those words by Charles Dickens open his classic novel, A Tale of Two Cities, about the French Revolution.  And just as sinister Madame Defarge sits knitting her ominous visions, we, too, are seeing visions of uncertain and troubling times ahead.

Will we experience revolutionary times?  In some ways we may.  Many believe that we need to experience a revolution in government - how it sets its goals, operates, polices itself, and is accountable to the public.  Do we need the same in the IT professional services business?  Certainly not, but we should use this wake up call to get back to the basics of good business practices.

As we prepare for some softening in our business, we are reminded that we do go through cycles.  No one can forget what we encountered just 8-9 years ago, as we prepare for this down cycle.  The good news is that historical patterns indicate that this time the impact will be less severe for IT services.  It could be that we learned from our mistakes and have a different perspective since 2000.  It could be that companies everywhere now value IT as an asset, thus cuts in technology investments will be smaller.  The reasons do not really matter as much as how we face our impending challenges.

There is more good news in that IT services firms have yet to experience much in the way of a slowdown, if any.  The bad news is we will have to work harder to get business.  So how do we prepare for 2009 and beyond?

We need to take a good hard look at our businesses today.  Then take action, which not only prepares us for the next year or so, but beyond.  In other words, we need to operationalize actions we take today and make them an ongoing part of the business.  Companies that already embrace this management style are better able to focus externally on customers, a distinct advantage over the businesses dealing with internal issues.

A simple mathematical equation illustrates this point:

This is not to say that dealing with internal issues is not important, just that the more they are operationalized, the less distraction they become to focusing on customers.  For example, paring non-performing staff is difficult.  It is always viewed as a morale deflator, and it ignites rumors about the business not doing well.  In fact, it can have the opposite effect when it is a routine part of running a business.  Experience shows that your solid performers, the ones you want so badly to retain, are OK with eliminating non-performers.  This helps improve their skills when they work with other top performers.  Also, it reduces the challenges faced on projects with subpar performers.

A number of good articles have been written about how to prepare for the possible slowdown in business.  This one is geared to ongoing business operations with the idea that the items suggested are for present and future benefit.

Business Functions Focus

The following chart depicts business functions broken out into seven basic areas.  For each of these an abbreviated checklist of action steps to improve business effectiveness (BE) is presented.  The lists are designed for you to check off what you currently do - a quick self-assessment.  There are no silver bullets or specific focus on best practices; just an emphasis on using good business judgment and executing activities with common sense day after day.

• Avoid taking drastic action - be rational in making decisions otherwise it becomes too hard to recover or make adjustments later (e.g., make cuts where feasible, but do not cut a piece of the business without a plan to make it up in another area quickly)
• Keep your fingers on the pulse of the business to assess your business effectiveness - step back and do an assessment today.
• Communicate frequently internally and externally to minimize anxiety, rumors and misunderstanding - listen as much as, if not more than, you speak.
• Spend money like it’s yours, which it may very well be.
  

Offerings

• Analyze revenue and margin to identify and confirm opportunities for growth - segment by types of services, industries, types of customers, etc.
• Do what you do best - capitalize on your strongest offerings to differentiate the company.
• Identify if you are missing any complementary services your customers are buying elsewhere or performing internally - offering such services, if economically feasible, can keep competition away and position you for more work if your customers need to reduce staff.
  

• Do not underestimate the value of marketing - it’s all about proactively generating qualified leads, which gives you the option to choose what you sell; not all marketing needs to be expensive.
• Make sure the marketing materials you have are in sync (i.e., website, case studies, customer testimonials, etc.) - otherwise you can confuse prospects and customers, as well as make selling services more difficult.
• Emphasize channel partnerships to give yourself leverage in lead generation - remember you provide leverage for the partner, also.
  

• Stay close to existing customers –-work to extend existing contracts in as many cases as possible.
• Enhance sales and sales management processes to improve efficiency - focus on the best opportunities and improve revenue predictability.
• Upgrade the sales organization - focus on the right skills needed to sell your services and customers.
  

• Focus on quality delivery to help control services costs (e.g., no re-work) and enhance customer satisfaction/loyalty.
• Ensure consultants are reporting all of their billable hours on a timely basis.
• Provide incentives (e.g., finder’s fee) for consultants to identify qualified leads at existing customers.
  

• “Hug" your associates - their loyalty is as important as that of your customers.
• Upgrade the quality of the associate group - include both delivery and support personnel.
• Defer hiring unless there is an impact on revenue in the short-run - consider using third-party independent contractors to fill in on projects.
• Review and tighten processes to improve efficiency around infrastructure areas (e.g., internal IT, accounting, facilities, etc.)
  

• Spend or make investments based on a zero-sum budget - unbudgeted expenditures are made as the result of a reduction(s) elsewhere.
• Focus on revenue or gross profit-based variable costs, which benefit both the company and contributing associates.
• Eliminate as much unreimbursable expense as possible - big areas include travel, meals and entertainment.
  

In closing, the final words of A Tale Two Cities prove significant, also.

“It is a far, far better thing that I do, than I have ever done; it is a far, far better rest that I go to, than I have ever known.”

Hopefully, you can eliminate the business concerns that keep you up at night.

Are you considering connecting your systems to remove that double data entry overhead?  Where do you start?

The most logical starting place is what data does the receiving system need that the sending system can deliver.  Break down the low level details fields and perform a mapping exercise to determine what type of programming is required.  Other logic to consider is data totaling, field concatenation, field translation, and so forth.

Then there’s the discussion of real-time (or near real-time) vs. batch.  How time critical is the information?  What types of technology challenges do you have with the real-time vs. batch desire?

So let’s say you get beyond these technical discussions and have a good solid design in place.  At this point some teams would assume they are done and proceed with the implementation steps.

As they say in the infomercial ------- But Wait .... There’s More!

Too often I’ve seen companies ignore the human element of system integration.  When systems stand alone, users of those systems have the power to define their own system usage.  This means workarounds are in place, subjective definition of information entry, and overall influence on what is good data and what is data to be ignored.  What happens when you connect systems?  Those human factors begin to influence each other.  What is acceptable to one system is not acceptable to another.  What is easily ‘filtered’ in one system cannot be easily filtered in another and leads to misleading information.

A great example of this is connecting a Sales CRM with a PSA tool used to handle staffing needs.  Opportunity entry is subjective by nature and the enforcement of a sales methodology can go a long way to ensuring data accuracy.  Now say that system is connected to a PSA that inherits matured opportunities that require resource staffing decisions.  If a salesperson is overly optimistic, staffing and hiring needs could be misinterpreted by the business against opportunities that are not as mature as viewed by sales.

Integration analysis must go beyond the technical connect the dots.  The human factor must be considered including a change management approach to existing system usage and processes in place.  This will ensure a higher success rate of achieving the desired objective.

Managing Expectations - It’s an art .... not a science

In the 1982 Academy Award winning film Gandhi there is one scene that will tell you everything you ever need to know about managing expectations.  The year is 1917 and Gandhi is visiting remote villages in India where famine and poverty are the rule not the exception.  When villagers ask .... no beg .... Gandhi for help he responds “We shall do what we can do.” By using ‘We’ and not ‘I’, he clearly stated that he alone could not do anything, but that everyone working together would be the action to take for creating solutions.  He commits to do something, however sets expectations appropriately and allows for the realism of the situation to unfold.  The problem can’t be fixed overnight; there are no guarantees.  He was truthful and in turn they became his followers.

In a business sense, how many times has an executive been in a seemingly dire situation with a customer?  If you promise too much, the disappointment when delivery does not meet those set expectations causes the customer to lose all faith in the company/executive/team.  Your trust is completely destroyed.  On the other hand, if you promise too little, there is no motivation to really fix the underlying issues.  Leaders must issue realistic objectives that engage all interested parties and not make promises which they cannot deliver, or set the bar so high it is unachievable.  It is a delicate balance between the two extremes - art not science.

Unrealistic Expectations - The number one ingredient in failure

When that seemingly dire situation arises during project delivery, it is imperative the vendor company leadership be committed to understanding all the issues swirling about and not the most critical of the day.  A conversation with a leading question to the customer of ‘what do you want’ can quickly become the unavoidable black hole of request after request to rectify every sin ever committed by anyone at the vendor company. Quickly sunk is the project team that has leadership trying to respond to the literal wish-list of the client. It sets up the team, client, product and both companies to fail miserably. 

Instead, executives must listen to all aspects of the current situation and discern the true interest of the client and the company.  Once the common needs are defined, a transcendent plan can be constructed to address those needs, eliminating the distractions of petty items and quickly focusing the team on the greater good.  Uniting the client team and the delivery team with the common dominator gives hope and revitalized commitment to the success of the project.

Setting Expectations - The primary key to success

Expectations go both ways.  Clients expect delivery of a defined scope of work, within a predetermined budget and within a specified time frame.  Vendors expect once that delivery is completed the client will become a promoter for the products and services.  So if both the client and the vendor have specific expectations of the process, then why are only the client’s expectations defined and refined up front?  The customer upfront should be made aware of what is expected of them after successful completion of the scope of work. In other words, set the expectation that the customer will be a PROMOTER of the services and products after successful completion of delivery.

During delivery, this becomes the temperature check per say for how well the customer’s expectations are being met and how well that customer is going to meet the vendor’s expectations.  It is a key indicator of progress vs. successful progress of the project and corrective action can begin the instant it is understood that expectations, on either side, are not being met.  Open, honest, clear and concise communication of expectations regularly during delivery will promote an atmosphere of commitment to success.

All in all, expectations are tricky to navigate.  If set too high, failure is assured.  If set too low, it all becomes a non-event with little or no commitment from those participating.  To plot a course for success, set expectations appropriately relying on pragmatism as a guide.

I dreaded conference calls for years. Finally I decided to stop complaining and do something constructive. To my surprise, I discovered that with a few simple changes conference calls become highly effective meetings.

The hardest part was screwing up the courage to ask people to try something different. Turns out there was nothing to fear. People were ready for a positive change.

Here are the steps I follow.

1. Introduce myself as the “host.” A host welcomes people and makes sure their needs are met. That’s a lot different from “being in charge.”

2. Start with a check-in process. I kick off with a formal roll in which I ask each participant:

• What would you like to have happen in this meeting?
• Is anything keeping you from being fully present during the meeting?

3. Create a virtual seating chart. We all need to know who’s on the line, so I draw a virtual seating chart. In WebEx meetings I display it as a mindmap or slide so everyone can visualize who’s at the virtual table.
When I want feedback on a topic, I go around the virtual table and call on people in order. People can anticipate their turn, so they feel better prepared when I call on them.

4. Have people identify themselves. If I don’t know who’s talking, I don’t know how to respond. To prevent this problem, I ask people to identify themselves each time they speak, as in “This is Stuart. I agree with Frank’s assessment of the problem, but I’d like to add an additional perspective.”

5. Periodically poll each person for feedback. Talkative extroverts tend to dominate conference calls. That’s why I periodically poll each participant for any feedback they care to share, as in “Pat, what are your thoughts on this?” Then I wait until Pat has time to put her thoughts into words.

It takes time to poll each person and get all this feedback, and it’s worth every minute. The group benefits by hearing feedback from each person. And everyone becomes more actively engaged.

6. End with a check-out process. I’ve found that people often walk away from conference calls feeling frustrated that the most important issues never even came up. I don’t want that to happen, so at the end of each call I ask each person if there’s anything important that hasn’t been said.

I leave five to ten minutes for check-out. It’s not enough time to resolve tough issues, but it’s enough time to bring them to light. I’ve seen big breakthroughs happen in these few minutes, when people get up the courage to say what really needs to be said.

If you decide to try these techniques, let us all know how they work for you.

It is fair to say that the most unflappable, were phased recently, as we patiently watched what seemed to be an unraveling of our financial system. I think I must have over heard the question “What are we going to do now?” a million times if I heard it once. I was one of the cynics that politely stated “this is what happens when we lose sight of what is real”, insisting that our behavior lead to the issues at hand, and that this correction was merely the means to stop the insanity. Despite my immense cynicism, there are great lessons to be learned. Better yet, these lessons are best learned and quickly put to use in reshaping your services messaging.  Let me clarify what I mean.

If you dissect the issues we have witnessed, there are several common threads that ran through the demise of many of these organizations. It stands to reason that many of our clients will be indelibly marred with these issues, realizing that while it happened to someone else, it could happen to them. Since those issues are top of mind with our clients now, and will be for some time to come, survival in these turbulent times must include revising your solutions and messaging to address issues. They are:

• What is old is new again. By that I mean, when you lose sight of the basics, you are bound to be brought back to them at some point in time, and will be forced to recast all decisions within the framework of good ole’ sound practices and principles. A key example of this is the current mortgage industry. What happened to the expectations that you had to save for a 20% down payment in order to achieve the American dream of buying a home? Better yet, how did we get to no down payment, or even still better yet, 150% mortgages? Further, are you old enough to remember 28/36? Do you know what this means?  These USED to be the standards of ole’. And not surprisingly, they were good standards that ensured home ownership was taken seriously, and was within your means based on sound principles like a percentage of your earnings. Those regulations may have seemed harsh, old, restrictive, or call it what you will, but they worked. My point is that we are now back to what is old is new again to re-vector our financial system. I think we need to revert back to what is old is new again within PSO. The best of the ole’ in my book was expert process design. When was the last time that you performed ABC? Do you recall what it is? It is Activity Based Costing, and honestly, there are few organizations that I work with today that can answer the question of what any commonly used process costs their organization. Considering that an organization is merely an interwoven set of processes that provide goods and services to their clients, the absence of accurate knowledge about the cost of these processes, can be very problematic. In the spirit of knowing why a company cannot get back in the black, I would submit to anyone in a PSO that you revert back to the old approach of identifying major cost takeout within a client’s processes, and immediately make an impact by making these processes significantly more efficient and effective. Do you think there is a client that does not need this today?

• Agility. It is clear to me, and it may be to you, that while unsound practices have lead to the recent demise of some of these financial organizations, another key factor has been their inability to “flex” as needed when consumer spending has gone through ebbs and flows. Take the big box concept for example. How much do you think a big box retailer can ebb and flow when it takes $2MM to stock one of their 65,000 square foot stores? As consumer confidence has waned, and foot traffic count has decreased, how agile is a single store to reduce the overhead that goes along with this hefty inventory? It is hard to do. That concept does not have much agility built into its foundation. As another means to adopt your PSO messaging to a topic that is on the minds of many companies, you need to design and define solutions around how you are able to help an organization become more agile. This means being able to address over capacity when times are difficult, such as the climate we live in today, but also defining how an organization can meet the increasing demands that we know will be upon us at some point in the future. There are plenty of historical indicators to show that the times we live in now are merely another economic “cycle”, therefore the best PSO, and one that will resonate well with their clients, will be able to show a company how it will be able to weather any economic cycle through the agility they obtain via the solution your services organization has presented. That messaging will help you sell for years to come.

• Predictability. There is much to be learned from the recent issues of the past weeks in this area. How many CEO’s said their companies were sound and that the “worst was behind them”, only to falter some weeks or months later? Too many. There is no greater service that a professional services organization can provide to a client today, than to ensure their solutions make a company much more predictable. This can come from a number of forms, but a key place to start is with decision support. If a company does not have the ability to accurately depict the two main indicators of success, revenues and cost, they will not likely survive in the volatile economy such as the one that we are navigating presently.  I would challenge that if your solutions do not move the needle for a company in the area of predictability, they will be hard to sell today. I would venture a guess that many initiatives that are not making organizations more predictable are being scraped as I write this. It is a must. The tolerance for providing continued guidance to Wall Street, seeming lack of foresight into how volatile an organization really is, and the final outcome being a lack of sustainability, is not going to be an acceptable process going forward. This process creates significant asset devaluation, before anyone can administer triage, all because an organization cannot accurately predict where it is hemorrhaging. If you want your services to sell today, they must be focused around how they can help to make a difference in the area of predictability. This messaging will sell.

Is it all bad news today? Not if you are in Professional Services. In all fairness, there is no better place to be right now in my estimation.  If your solutions can bring a company back to good ole’ sound business practices using expert process design, make a company more agile and predictable, you will be a key business partner for many years to come.

Over the course of my career I have observed that both consulting companies and IT organizations generally do a horrible job of marketing, selling and communicating. I’ve discussed this with many of my colleagues over the years and found that not only do they usually agree with me, but many actually take pride in doing a bad job!!!! Technically-oriented professionals seem to have something resident in their DNA stack that produces a genuine disdain for anything related to “communications” or “selling.” They view these activities as beneath their dignity and position in life, especially once they arrive at the magical executive level.

Of course, that all changes pretty dramatically when these same people start to carry a P&L or when they start a consulting firm and the bank balance begins to approach single digit levels. Right about then they also run out of friends to call for new leads, the panic sets in and all of sudden selling isn’t such a bad thing! It’s at this point that they (and I include myself here) TRULY understand why marketing is so important to the success of the organization.

It doesn’t have to be that way. In fact, there are some pretty simple principles and examples that we can learn from another similarly technical field.... the restaurant and fine dining industry.

Cooks & Consultants, More Alike than Different

At this point you’re probably thinking “Tom, how the heck can you compare what Wolfgang Puck does to what I do?” or you’re wondering if I had too much of the fine wine that Wolfgang serves in his restaurants. Well, when you look at what they do and what we do it’s actually pretty similar.

A cook takes a recipe (methodology), adds in ingredients (consultants) and creates a dish (completed project) by using his specialized knowledge and experience. The other very interesting similarity is that the cook’s customers (you and I) have all the tools necessary to create the dish themselves, just as our customers can certainly install the software or do the analysis that our consultants do for them. We pay Wolfgang Puck a big premium for a steak and potatoes meal for the same reason our clients pay us a premium to perform the project: Everyone is looking for a much better end result, a better experience, superior quality, or we simply don’t have the time or ingredients to do the job.

Marketing Lessons from Wolfgang Puck

We also share the same challenge as the chef: How to convince our prospects to trust us with an expensive and very important project and at the same time convince them that our firm will do a better job than the many competitors vying for the same project. Not much different than the chef who opens a new restaurant in San Francisco or New York.

Wolfgang and Emeril do a few things that are really interesting to those of us who like good food. One of the most interesting things they do is give away, or sell for less than the cost of a single entree, their intellectual property - their methodology so to speak. They call them “recipes.” They put these recipes in books, and when you and I buy the books we look through them and the food looks so good we end up going to Spago for that special graduation dinner. Or we try to make gumbo and discover that it doesn’t quite taste like it did at Emeril’s in New Orleans.

These guys, and their less famous colleagues, also do cooking demonstrations where for the investment of an hour or so they show you how to cook great food. You get to taste it and then buy their cooking equipment or go to their restaurants.

And we all know it works because we go to restaurants and spend a couple of hours and a couple of hundred dollars for meals that we can prepare at home, just like our customers do with projects.

How Can We Apply This to Our World?

Pretty easily I believe, and in ways that will take marketing and selling and make them enjoyable, successful and more natural for us and our consulting teams.

The principle behind this marketing is pretty simple and is based on the fundamental premise that you are an expert in an intellectually based field. A cook has an oven and a consultant has a computer, but it is the combination of....

Methodology (Recipe)
Consultants (Ingredients)
and
Experience (technique)


that creates the satisfying end result, superior quality and job well done.

So let’s look at some specific ways where we can emulate Emeril & Wolfgang:

1. Give your prospect a copy of your methodology or a sample of a completed project notebook with ALL the deliverables.
   
   
   Sounds a bit crazy, doesn’t it, but it’s no different than Emeril giving away recipes. What it does is demonstrate to your prospect that you’ve done your homework, that you’ve done this work many times and that the work that you put into one of these projects is much more complex than they imagined. It also serves to explain to the prospect what all those “resources” will be doing when it comes time to negotiate the final statement of work. It also further reinforces the need for those specialized ingredients, your consultants.
   
   
   
2. Do some actual consulting during the sales process.
   
   
   We need to scope projects in order to provide good proposals, so why not treat the scoping effort like a consulting engagement and provide the prospect with guidance, advice and useful deliverables? This is the time when your prospect is evaluating your work and your people (taste testing how you use the ingredients, technique and experience) and you need to show off your stuff. All too often we are focused on uncovering potential risks when we should also be demonstrating our expertise by providing some direction and value. Do both.
   
   
   
3. Build a relationship before you get paid.
   
   
   Everybody knows Emeril because he’s on TV every night showing you how to cook all kinds of great food. When you go to New Orleans (or Las Vegas) his restaurant is one of your first choices. Do the same with you prospects. Do your best to get yourself and your consultants in front of prospects as much as possible before they’re ready to buy. Attend the corporate briefing during the early stages of the buying cycle, even though you or your consultant will probably do nothing more than sit and smile for the two days. Build the familiarity, provide opinions and perform like the expert that you claim to be. When the time comes to make a decision on the project, you’ll be at the top of their mind. Without the relationship, you’ll simply be a name on a list.

Yes, this all makes perfect sense. And yes, it takes a lot of commitment, discipline and patience to work, but it does work. In a past life at a large software company - my team used these techniques and was selected for an eight-figure, global consulting project by a Fortune 50 company with no competitive bids. The year before we won a similar seven-figure engagement from another Fortune 100 company, again facing no competition.

So remember that you’re just like a celebrity chef. You can weave your work into your marketing with profitable results.

1. Share your recipes with your prospects by giving away your methodology, plans and deliverables.

2. Let them taste your cooking by doing some real consulting during the selling and scoping process.

3. Build a relationship with your prospects before they’re ready to buy so that when it’s time for that special meal they’ll think of you first.

Bon appetit and happy selling!

Background

Although growing trends illustrate that enterprise corporations are moving towards on-demand Software as a Service (SaaS) solutions, traditionally this platform has been most popular with small to mid-sized businesses (SMBs).  Online, hosted offerings present a cost effective option to more expensive, slower to deploy client server options.  Regardless of the size of the customer, the deployment methodologies involved vary greatly from company to company.  Smaller organizations tend to work with tighter budgets and often demand more services than they are willing or able to pay for.  Developing a straightforward project plan and setting expectations from the beginning are essential practices of any deployment.  However, these practices are exponentially important when dealing with the narrow margins of an SMB deployment.

How Can You Deliver Effective SMB Deployments?

Although every deployment contains its own custom aspects, the following best practices provide a general roadmap to success:

1) Don’t make certain assumptions - We all know what happens when you assume ... The same applies for software deployments.  Enter pre-planning with a clean slate and probe for the information necessary to develop an effective approach rather than bring in trends from previous deployments.

• Just because the organization is small doesn’t mean their requirements are simple.  Business processes vary greatly from company to company and their complexities are not directly proportional to organization size.
• Be careful to not put too much stock in what the client “learned” during the sales process.  Sales demonstrations are more often than not floods of material.  Information gathered during a long sales cycle can easily be forgotten or misinterpreted.

2) Plan, plan, plan - A concise, definitive project plan is the simplest and most effective way to set client expectations.  Not only will it help your consultants perform within both fiscal and time budgets but it also will allow clients to monitor the progression of the deployment.

• Start with an end goal and work backwards.  Knowing where you are going is half the battle to getting there. 
• SaaS software has created the notion of a remote deployment.  Remote deployments often work well for clients with tight budgets, but be sure to convey to your clients the known risks of such an approach.  Collaboration is always easier when in person, so be sure to schedule frequent check-ins via web conference and phone. As needed, and depending on the complexity of the engagement, an on-site deployment may be the best route.
• The greatest challenge to successful deployments is when the consultant and client are not on the same page.  Before beginning, confirm the scope and estimate of the project to avoid delays.  This conversation will be much smoother if had from the start and not a week into the deployment.
• Create a “parking lot” to ensure that mission critical tasks are executed on time.  It’s easy to be distracted by secondary priorities. Focus on the ‘must have’ objectives and park all other requests until you have fulfilled the top priorities. Time for deployments is always limited so it’s essential to choose which features/functionality is ‘nice to have’ versus ‘must have.’
• The best way to boost employee adoption of a new system is to have an internal resource that has been with the project from the start.  Push the “train the trainer” approach with the expectation that the “trainer” will actively participate in the company-wide rollout.

3) Know who you are working with - Active involvement with a select group of internal resources provides the best avenue for success.  However, too many voices will impede the process. Less is more when it comes to deployments and having a centralized decision making body will pay dividends.

• Identify who are the key decision makers.  Confirm their availability and hold them to it especially if deploying remotely.
• Attain “C- Level” involvement whenever possible.  Executive sponsorship will guarantee the maximum value and return on investment for the client.
• Ensure that middle managers are involved during testing and training since they will most fully utilize the system.

4) COMMUNICATE - Constantly keep clients informed with focused, concise emails.

• Provide daily updates on progress, percent complete, and key issues.
• Highlight any new requirements or changes in scope.

5) Execute - Now that your plan is developed, follow it!  Stick to your established milestones and stay focused on your end goal.  Closely abiding by a mutually agreed upon plan will increase employee satisfaction and reduce miscommunications.  Product deployment is the first client interaction with your team and a smooth process will improve customer retention and business opportunities.

• Monitor your hours diligently to arrive as close to estimates as possible. 
• Changes to the plan will occur.  As soon as you need to deviate, tell the client in writing.
• Expect to say, “Let’s put that in the parking lot” often.  Keep the client focused on mission critical processes and save fringe functionality for later.
• Do not let the client sit on the sidelines.  Demand attention and involvement to ensure that they play an active role in the decision making process.

6) Integrations - SMBs are always looking for ways to further streamline and automate their workflows and integrations provide an avenue to combine your SaaS offerings with already invested applications.

• In order to save the client and you both time and money, have detailed conversations regarding the level of need for integrations.  Establish what integrations are required as well as a proposed timeline for when they need to be in place.

7) Handoff - A clean transition to your organization’s support and client management infrastructure is a critical step to get your client off the ground running.  When deployment is complete, provide your client with an updated plan that clearly illustrates project completion.  Openly communicate the client’s go-live status to your support group and be sure that the client is aware of support’s availability.  Be sure to detail any unique nuances of the client’s configuration to ensure optimal internal knowledge.

Conclusion

No two deployments are the same.  Much like the services they provide, small businesses have very unique processes and workflows with which they run their organizations.  By following the above best practices, you will be able to navigate through these idiosyncrasies and complete a successful deployment that both meets client expectations and delivers your product on time and within budget. 

As of the writing of this article, the top headline on Yahoo! news is Oil soars on dollar, Energy Dep’t report on falling supplies. The top video is Floods threaten economic disaster in Midwest. Dow down 1.4%. Nasdaq down 1.9%.

Regardless of whether or not we are actually in a recession, the economic news and outlook hasn’t been good for about a year. As I speak with leaders of professional service business, most of them haven’t reported ill effects on their firms from the economy. Still, they’re nervous. And a case of the yips across a senior management suite can lead to all sorts of different behaviors, some good, some not so good.

For those of you who are feeling the crunch to “do something,” here are some thoughts to help you avoid common mistakes and to take advantages of opportunities.

Don’t Overreact

When things are good, they’re not necessarily as good as you think. When things are bad, they’re not necessarily as bad as you think.
Just because it’s been slow for a few months, or you think it might slow down soon, don’t start making wild decisions or cuts. Keep a steady head about what’s really going on. Look past the wild swings in revenue (and enthusiasm and attitudes of team members) that might be caused by short-term factors.

Redouble Your Marketing Efforts

As a marketing consultant and advocate, this might seem self-serving. I don’t mean it that way. I’m merely suggesting that during any economy, firms can grow faster and win more clients if they step up their marketing energy.

Something about an economic slowdown seems to cause leaders at firms to focus inwardly. They self-analyze, having meeting after meeting about strategic direction, salaries and cost structure.

When it comes to business development they say, “It’s tough out there. I’m getting less action in the market than ever.” So both marketing staffs and professionals who should be bringing in clients at firms slow down and do less.

This time and energy would have been better spent focusing outwardly, working to improve brand, fill the pipeline, and bring in more clients.

Take Advantage of Opportunity for Change

Service firms “embrace change” about as enthusiastically as the sports community of Mexico embraces curling. However, service firms often shed their reluctance to change and propensity for slow decision making when faced with a business slowdown.

The halls at most service firms are abuzz with “what needs to happen to make this place better” during all economic conditions. When things are good, unproductive staff are often left to keep working. Sluggish marketing is allowed to plod along like the Old Gray Mare. Subpar business units and initiatives keep on keeping on. And bold, innovative initiatives die in committee because they’re “too risky.”

As you approach making changes big and small, keep the following one question in mind, “If I make these changes and the economy and business stabilizes, will we be in better shape or worse when things turn around?”

If the answer is “better,” make the changes and make them decisively. A slow time at the company is often the best time to reshape the firm and make it stronger for the present and future.

Recessionary times can be tough on the consulting community, but you may find that there are more opportunities now than ever - if you are willing to consider another path to delivering your skills.  Employers often cannot locate the expertise they require, hiring cycles are protracted as employers search for the perfect candidate, experienced employees retire, and companies often try to cut down on the overhead of full time employees.  Yet it is not the classic “consultant” these companies seek. This economical climate has given to a rise in the temporary employment of the interim executive.

We’ve all seen the increase in the use of short-term, or contingent workers in all parts of business and industry. In fact, the contingent workforce is growing at a rate three-to-four times the rate of the traditional workforce, and is expected to be 25 percent of the entire workforce by 2012.(1) And the growth in the use of interim executives is even greater.(2) Businesses in Europe and the UK have long relied on interim executives in leadership positions; in North America the concept has emerged as an effective way to fill critical business roles and provide quick introduction of new ideas and techniques.

One obvious use of an interim leadership is to fill the seat of an executive who suddenly or unexpectedly leaves the company.  Around 25% of all interim executives are hired to fill shoes suddenly left vacant.(3) And, despite the lip-service currently paid it, succession planning for key executive roles is lacking in the majority of businesses—especially in small and middle market companies.  Whether the executive is suddenly dismissed, quits, or is otherwise unavailable, the effect of the loss of an incumbent executive can be catastrophic.  Traditional routes to replacement are slow: on average it takes 18 months to replace a senior level manager or executive.
But why not hire a management consultant? Let’s look at how companies view the difference between hiring a consultant and an interim manager or executive.

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(1) Quoted from Linda Stewart. CEO of EPOCH in “Part-Time Workers: A New Leadership Paradigm” by Kellye Whitney in Talent Management Perspectives. Published January 2008

(2) Executives and professionals constituted 11% of the entire temp workforce in 2004, according to the U.S. Bureau of Labor Statistics.

(3) Ibid.

Re-evaluating your skills sets and those of your professional services team may well reveal experience and expertise that allows you to approach today’s companies with a different business proposition than the tradition “consultant” role you have provided in the past.  While solid business experience is required on the part of the interim professional, such experience and expertise is often found within the consulting ranks.

This option only applies to experienced consultants. Rather than acting in an advisory or consultancy role, you or your team members must be accountable leaders who walk in ready to implement and manage a business or project to its successful conclusion, and be measured on delivering results, even when the tenure may be relatively short. 

There is a clear economic value to the employer of such short-term use of your skills. Providing interim management presents the hiring company with a lower cost of leadership talent; in fact, expense management is aided with interim employees at any level of the organization. Particularly in times of fiscal or economic uncertainly, the ability to readily add and subtract both staff and executive management represents a return on capital strategy that impacts the bottom line.  As assignment-based employees, interim executives provide a cost-effective, short-term solution to fill business-critical gaps or drive major initiatives. Research firm MORI found that companies regarded interim executives as both more suitable and cost-effective than management consultants. (4)

So if you have experienced talent “on the bench,” consider adding placement in interim positions to your recessionary bag of tricks.

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(4) MORI / BIE Captains of Industry Survey 2005 - Interim Executive Management ©MORI / BIE Interim Executive Ltd. 2005.

In working with many companies regarding process definition and efficient operational tool usage, I’ve come across a Catch-22 of sorts: 

• process driving tool selection and usage
• tool features and limitations driving process

You need to watch that the tool doesn’t start to dictate your processes. Compromise is good to a point but if the tool cannot handle your processes efficiently or introduces more manual work than you had before the tool, then you may need to revisit your tool selection.  Carefully documenting your requirements during the tool selection process and weighting the critical ones that will keep or improve your business efficiency will help you avoid this situation.

What about the example of a company with a robust tool and not using it to its fullest extent.  This is the biggest catch-22 area since the tool selection may not have included requirements for these other areas or perhaps included them but with lower priority and weighting.  Defining what your processes are should be done first.  This may include a complete ‘outside of the tool’ definition or a process that has limited information extracted from the tool.  This gives you a base of expectation.  Review the tool next to see how much of the process can be accommodated.  Details will be revealed about what can and cannot be accomplished or automated.  Now the decision is how much of the process will be handled by the tool and how much will continue outside of the tool.  Is the tool changing your process?  If so, is it in areas that can be compromised?  Be careful not to force tool usage and make your process more cumbersome. 

Best practices for most tools are available from the product vendor’s Professional Services organization or partners.  These are great resources to help you with process definition pertaining to the tool as they’ve worked with many clients that may be in your similar industry.

If your business doesn’t have a set process or is in the middle of redefining process, then you can use the tool to drive a process definition.  In this case, you start with the tool and what features it has in certain areas such as resource management, project management, etc.  Warning - many products have robust features so you can easily fall into a ‘use it all’ trap.  Look at the options and work out a business process that takes advantage of automation, if desired, and good reporting.  Whenever I work with companies my emphasis is getting information out of the tool - that typically drives what you need to put into the tool and the details about how to ‘characterize’ this information.

To established business processes from a tool perspective, best practices can be extremely helpful and save you lots of time in initial definition.  Business consulting organizations specializing in your particular tool can point out the do’s and don’ts as you define rollout plans and configuration needs.

The result of marrying business process with tool usage should be efficient business operations including data tracking and reporting.  Not a test of how many tool features you can use!  And definitely not a burden to your end-users!

Just two years ago, more than 75 percent of our implementation work was done on-site and face-to-face across the globe in places like New York, Sydney and London.  Higher gas prices, increased airline fees and travel hassles have made it far more challenging to fly or to commute long distances to deliver projects. With the cost of travel skyrocketing and with some 800 customers worldwide, our margins were getting squeezed to the point where we could no longer do business as usual.  We needed to re-think and revamp the processes for how we interacted with our customers, and communicate those changes in a way that made the customer feel more valued - not less.  As a result of this company-wide effort our on-site activity has significantly decreased to just 30 percent—at most.  So what changed?  We decided to implement the following programs and services:

1. Onsite versus online services

We started to communicate with our customers about the benefits of online instead of onsite services. Today we go onsite to meet our customers and the project teams --- to get to know one another, and to understand their needs and their business. During the initial one or two face-to-face meetings we work hard to establish trust and build the relationship so that much of the remaining work can be done remotely. Customers love it, more work gets done faster, and we are able to handle a larger number of implementations with less staff since less time is no longer wasted on travel. Our customers win by saving on travel costs and faster service delivery, and we win by having lower turnover rates on highly specialized consultants since less travel creates a more stable and happier career life for our service teams.

2.  More efficient project meetings

Disconnected systems and management spreadsheets lead to organizations that often require more face-to-face meetings to get things done. At Tenrox, we have agreed on and implemented role-based dashboards and key metrics per department. When I arrive at the office, I log into my portal and can see how every team is doing. The information I look at is not coming from the team leaders or their assistants. It is derived from data entered directly from the project contributors; managers simply have to approve or reject the data entries. Therefore the business unit performance, project costs, revenue, issues, and change requests I look at are based on actual data reported by our staff.

These reports and dashboards have virtually eliminated status report meetings. We meet to discuss strategy, to celebrate wins and review losses, and, yes, to review project progress; but at least in any such meetings people are not showing up with manipulated spreadsheets or to repeat verbatim what I could get from the dashboards and reports I already have access to.

Dashboards and project management reports based on live data, online approval workflows, and online collaboration technologies have reduced our G&A travel costs by at least 50% over the last two to three years. Not to mention the reduction of time and energy we wasted going over “design your own” spreadsheets in management and review meetings.

3. Combined events

Like many other companies today, we have a highly dispersed workforce. Our employees and outsourced teams work from various offices and homes across three continents. To make sure all of our teams are aware of the company’s mission and business plan we try and bring everyone together once or twice a year in Montreal, where the company was founded and where most of our R&D staff is located. In the last few years, we have combined all-hands meetings with performance evaluations, training, company parties and picnics into single events.  We do our best to try and make the trips as fun, worthwhile and productive as possible, while at the same time reducing the travel costs we would incur if we organized some of these events separately.

Higher Gas Prices; Greener Project Management

Using the latest, efficient technologies for professional services projects such as offering online support services, remote team and customer meetings and remote implementation processes while also using internal, automated reporting methods, has proven to offer a huge savings for us in time and expenses in addition to the environmental advantages it brings forth.  Customers and employees appreciate that the same amount of work, if not more, can get done using our new project management methods while the client-supplier relationship is still maintained.