For most professional services organizations (PSOs), business life starts with spreadsheets. As they grow and win more projects and employ a variety of skilled professionals, companies continually formalize their processes and acquire key technologies – financial management, human resources, resource management and more. However, irrespective of size, PSOs face a common challenge they need to address: the gaps that can emerge between the different systems that bridge the front office and back office.
Growing PSOs often purchase CRM solutions to help sell, finance solutions to manage accounting requirements related to what they’ve sold. To drive execution, project management tools are adopted to help manage execution on engagements. PSOs often fill the gaps between these solutions with spreadsheets, workarounds, and manual processes. As they grow, these become inefficient, and the gaps widen.
For larger enterprises, the challenge is different. They often fill the gaps with point solutions that fulfil a specific need, or they extensively customize existing solutions and platforms, such as ERP, to meet their evolving needs. This approach also has major drawbacks; point solutions are often siloed and no system binds them together and delivers the oversight that allows them to improve utilization and profitability. They also miss fundamental functionality that is essential to effective professional services operations, such as advanced resource management that maps supply (the global resource pool) to upcoming demand.
Recognizing the Gap
Professional service companies must recognize the practical problems that materialize when gaps appear between the front and back offices. Jacqueline Stanley, Director of Delivery at Hero Digital, highlights some of the problems that emerge because of a disconnect with the front office. Stanley describes a typical situation in agencies where the account teams win new client work and then pass the details to the delivery team. According to Stanley, the delivery team tend to be brought into the discussions at the later stages of the process, possibly with unrealistic goals. “We have to translate those high-level requirements into deliverables to get on a good foot with the client.“
The agency then must renegotiate those goals or risk failing to meet those objectives. Stanley added, “When an agency misses the mark with a client, it’s always the agency’s fault. We will be responsible for the revenue leakage, and our margins will go down. The delivery team will be upset despite the fact that the team worked hard to develop work for this client, and the client remains unhappy.”
To avoid unhappy clients or employees, PSOs must provide managers with visibility of the activities that happen between the front and back offices. Chris Mitchell, VP of Global Accounts at Kantata, who works extensively with enterprises looking to address operational gaps between their front and back offices, says, “The activities that flow between the front and back offices are responsible for taking the forecast and revenue margin from your CRM system and turning it into recognized revenue in your back office system. This involves accessing multiple processes: HR, time management, expense management, resource planning, etc. However, it is these core processes involved in delivering the forecast.”
Overreliance on Spreadsheets
Spreadsheets often worm their way through all key areas of organizations. As a result, many PSOs still rely on spreadsheets to support core services, such as forecasting or resource planning. The existence of spreadsheets in a mature PSO indicates potential gaps between the front and back offices through which revenue, information, and efficiency are likely to leak. Tom Schoen, CEO and President at BTM, described this, saying, “When I first started BTM, we ran it on spreadsheets that were all interlocked. It was pretty easy to do when you have only half a dozen projects running at the same time. It doesn’t work when you have 70 to 80 projects running. We needed a professional services tool to be able to help manage that workload.”
To align the front and back offices, professional businesses need to replace spreadsheets with purpose-built technology solutions so that groups can collaborate more effectively. Here’s an example: a proposal management tool can quickly model resource requirements, identify potential shortfalls, and inform the front and back offices of margin implications of proposed work. However, many business organizations continue to use spreadsheet-based proposal tools. The consequence is that information is locked in multiple individual spreadsheets, preventing key decision-makers from getting that forward view of overall demand, information which is particularly essential for resourcing teams.
New proposals created by sales teams can help indicate early signs of changes in demand, which help resource managers understand hiring and staffing needs, with enough time to do something about them. When proposals are managed in spreadsheets, resourcing teams lose the visibility or access they need to that project pipeline information. Consequently, the resourcing team doesn’t see these proposals until the project has been won or is at a late stage. This puts them immediately on the back foot, forcing them into a reactive staffing process. They are now required to scramble to assign resources to meet the project requirements.
Fixing the Gap
Now that you have identified the gap between your front and back offices, what can you do to fix it? Most importantly, PSOs should ensure their tech stack provides connectivity and insights in the following ways:
- Managers in PSOs must have visibility of the project pipeline of planned and current projects, revenues, margins, and expenses. This information will come from CRM, the HR system, PPM, timesheets and expenses, and other sources.
- To tackle the complexity of existing systems, firms should consider using a specialized professional services solution to enable all stakeholders involved in the engagement lifecycle to collaborate efficiently.
- There needs to be commercial context for each engagement. The integrated information will enable the commercial impact of different resourcing strategies on performance to be continuously re-evaluated in the context of available resources.
- The solution should provide visibility of all key project KPIs in real-time. Such a tool will enable project teams to deliver or actualize the margin and revenues originally baselined at the proposal stage.
This approach would break down silos and build bridges between the front and back office systems. It provides visibility to internal managers so they can make better everyday decisions that impact project margins and revenues.
A Heroic Solution
Hero Digital uses the Kantata Cloud for Professional ServicesTM to close resource management gaps and collate critical information. Stanley says her agency “Lives and breathes with Kantata’s Resource Center. It has empowered everyone in the company to work more effectively. Individuals can see their workload. Resource managers have visibility on what teams have been allocated and ensure work is evenly distributed or individuals are available to help with a project or sales pitch. It helps Hero Digital become more flexible and agile.”
By addressing visibility and agility gaps, Stanley says, “Kantata has doubled the right conversations within the agency. Data is just a number and doesn’t do anything without a conversation. When a manager has the correct data in front of them, there can be a conversation about what can change and how it can be fixed.”
If you wish to find out more, check out Kantata’s latest whitepaper, “Mind The Gap: How to Bridge Front & Back Office Systems for Professional Services.” This explains the gaps that have the potential to emerge between the front office and back office in professional services organizations. Additionally, learn how solutions like Kantata make businesses more flexible and agile by bridging those gaps.
Kantata takes professional services technology to a new level, giving people-powered businesses the clarity, control, and confidence they need to optimize resource planning and elevate operational performance. Kantata’s purpose-built software is helping over 2,500 professional services organizations of all shapes and sizes in more than 100 countries to focus and optimize their most important asset: their people. By leveraging the Kantata Cloud for Professional Services™, professionals gain access to the information and tools they need to win more business, ensure the right people are always available at the right time, and delight clients with project delivery and outcomes.
