The incremental value of PS teams in a tough economy

Those businesses involved in the practice of providing professional services (PS) to their client base have not been immune to the current economic downturn. It is hard to believe that only twelve months ago, business leaders were facing the most challenging hiring environment in years – the challenge: how to find and attract great people to the business. Twelve months later, these same leaders are looking for ways to ensure that they can pay and retain the staff they spent all that time looking for.

The metrics in a professional services environment are very easy to understand, but very difficult to master. Three key metrics often discussed include utilization, pricing models and overhead management. Many businesses will make the mistake of only looking at the metric of utilization when making staffing decisions regarding net new hires or determining adequate resource levels. With everybody so focused on running hard the last couple of years chasing new clients, the existing client base was left in the position of fighting for scarce resources, getting little attention from those companies that worked so hard to gain their trust in the first place. The result is that it was often only the professional services team that carried the ball on behalf of the organization through this period and have since established deep relationships with the company's key clients. As a result, when companies decide to downsize the professional services team in a stagnant economy, they may ultimately need to ask themselves a second question – “Are we losing clients with these personnel decisions as well?”

Times like these represent a great opportunity to reengage with your key clients through a combination of focused business development efforts along with creative initiatives from your professional services team. If you are in a position to provide solutions through your professional services team that promote cost efficiencies, you may be able to provide significant value to your clients while helping your own organization weather the storm at the same time.

Start with the end in mind

An old cliche to be sure, but one that has certainly proven to be invaluable within our engagements with clients looking for assistance in defining/refining their corporate strategy. Nine times out of ten our clients are initially looking to document a description of who they are today but are often unwilling to articulate who they want to be tomorrow. As a result, they find it excessively difficult to determine how much capital they will need to inject/raise, how many employees they will require to operate the business, etc.. Without at least a vision for where you want to end up (i.e. how much revenue, what level of market share, etc.), it will be next to impossible to identify your next steps.

Our experience has been that the very first exercise you should run through before making strategic decisions of any kind is that of drafting three year pro forma financial statements that are founded on the best information available to you at any given point in time. On the surface this may sound like a trivial exercise but ultimately your projections will serve to provide the logical backdrop for nearly every strategic decision you will have to make going forward:

• Don't know who to target with your product? Do the math to determine how many sales it will take to achieve your revenue targets and then assess how many target markets will be required to support these sales levels.
• Don't know how many people to hire for the upcoming year? This answer should flow easily from the previous math coupled with your understanding and/or expectations for best practices around employee productivity.
• Don't know when you should sell your company? Your financial projections will give you an accurate assessment of the value of your company over the next three years and from there it is all a matter of your personal objectives.

Just like being in a car, you can drive around endlessly forever but if you at least have a map that points you in the right direction, chances are that you will end up significantly closer to your preferred destination.

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MTM's consultants can complement the vetting process

March 2009 - Having worked with many companies that have pursued private or public equity, it has been the experience of the Marketing the Mousetrap (MTM) team that one of the most overlooked components of the due diligence process is that of the company's ability to implement and sustain an operational model that will actually deliver the financial results that are projected through the company's pro forma financial statements.

An accurate assessment of the strategic and operational elements of the business are as critical as the financial due diligence undertaken when evaluating investment opportunities. Utilizing MTM's consultants to augment your team when generating these assessments (i.e. strength of the existing management team, health of the opportunity pipeline, etc.) can save you a tremendous amount of time and almost assuredly will provide you with the level of confidence required to make those critical investment decisions.

ADVERTISEMENT: March 24/09

MTM's consultants are a practical alternative to justifying additional headcount

March 2009 - The current economic climate has forced many companies to severely restrict their capacity to hire full time employees, resources that are often needed to ensure that the company can continue to achieve its business objectives in an increasingly competitive marketplace.

A logical alternative to absorbing the additional costs associated with hiring a permanent resource is to engage a professional consultant who possesses the skill set your company currently requires. Your business gets the assistance it desperately needs and the related investment is tied only to the duration of the project itself. No additional training, benefits or bonuses required.

Whether your company has a need to redefine its go-to-market market strategy, tighten up its competitive positioning or just to figure out a way to drive more revenue with fewer resources, MTM can provide much-needed solutions at a time when hiring can be practically impossible to justify.