For the last ten years, I’ve been managing Professional Services Engagements along with the teams, groups, organizations, and companies that deliver them. Delivering Professional Services Solutions has been an integral part of the company’s offerings or in some cases, the basis of the company’s business model. I have managed engagements with as few as two and as many as fifty people involved in delivery and development. Interestingly, both scenarios can be extremely complex and risky. Managing in that environment will often make the difference between success and failure.
Many executives will tell you that achieving success with a Professional Services organization is all about utilization. While keeping utilization numbers up is a key to reaching financial goals in the short term, having this as a primary focus will often lead the organization down a path of ever shrinking size, capability, and revenue. Indeed, many of these firms are relegated to nothing more than staffing firms with no real differentiators or defensible technology base. They find it difficult to compete and find margin difficult to maintain.
The real key to managing a Professional Services Organization has more to do with ones ability to balance utilization while at the same time investing in core differentiating infrastructure and capabilities. This happens through training and continued development of key technologies and competencies.
Companies source solutions from Professional Services firms because it is more cost effective and / or timely to do so. The price they are willing to pay generally is a function of the differences between their internal costs and that which they can find on the market competitively.
In general, the greater a Professional Services firm’s ability to differentiate competitively on a defensible set of technologies, infrastructure, or solution set the greater margins and utilization they will achieve. Maintaining and building on these differentiators is what really positions a company to scale in size and revenue.