One of the great things about being in the Bay Area is having a community of companies and CEOs who are all navigating the same market trends and technological hurdles. I’m part of one of many alliances for CEOs in the professional services industry, and at a recent gathering with 12 of these colleagues, I was struck by a problem every single one of them have: it’s nearly impossible to find skilled people to bring into the company, at an affordable rate.
On one hand, that’s not surprising—good people cost a pretty penny, sometimes upwards of $200 an hour. Unfortunately, these companies can’t always just pass on higher rates to their customers, who have their own budgets to worry about.
It’s the ultimate paradox: If they raise rates, they lose customers, but if they don’t raise rates, they can’t get the right people to actually service their customers. This is the biggest issue for these Bay Area CEOs in professional services—not regulation, not taxes, not dealing with technological hurdles. The only solution is to become more efficient and better utilize the resources they do have.
Think about it this way—say you have a project that requires 10 “units” of programming. A senior programmer might be able to handle 1 unit every hour, while a junior programmer needs three hours to finish up one unit. That’s a difference between 10 and 30 hours, but the question of how to distribute the work is more complicated than the number of hours it takes.
This is where service requirements planning (SRP) and resource management comes into play—you need to be able to understand a job’s particular needs and build a resource schedule for the job that fits alongside commitments that have already been made.
Instead of simply assigning the senior programmer to the task, you need to be able to create multiple schedules that delegate work in different manners in order to find the one that will get the most out of the current resources while also delivering on time. Perhaps the senior programmer quickly tackles 5 of the units, freeing them to be shifted to help meet a crunch deadline with another customer’s project. The junior programmer takes the other 5 units, albeit at a slower pace, but at a pricepoint that your customer is more comfortable with.
There is incredible potential if professional services companies can figure these balancing acts out. It begins by talking to the client and showing them in very clear, descriptive terms, how long the project will take given the current workload. With SRP, they can see the impact of those high-cost, high-productivity people. You can show them how, exactly, they might need to pay a premium if they want the work done sooner.
By finding billable capacity inside your existing resource structure, you can take on more work alongside your existing workload. This leads to new profits, which make it easier than ever to hire those expensive people.
Here at Bi101, this is our bread and butter—we specialize in helping companies get set up with the tools they need to make these efficiencies happen. NetSuite’s SRP features help manage resources effectively, and break down projects into every skillset and every time block that will be needed to get the project done. You’ll be able to squeeze more out of your resources without annoying your customers by delivering late or going over-budget.
It’s not to say the problem these 12 CEOs are having will be solved easily—SRP is a complex organizational strategy that requires time and effort. The first step is getting set up with the right tools. The rest is all about resources—both about what you have right now, and what you want to have in the coming months or years.