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the contract

Capricorn LLC Web Services 500 Mar XX Discussing M. Cooper

Delta LLC Security 800 May XX Discussing J. Smith

Europa Ltd Supply Chain 750 May XX Discussing J. Smith

Gregorian Inc Web Services 500 Jun XX Planning L. Doe

Exhibit 13.9 Current Business Portfolio Chart

BENCH STRENGTH REQUIREMENTS. Some firms have a fairly predictable
progression of business through their pipelines as mentioned earlier, which
makes it possible for them to operate with anything between a small- and
zero-size bench, achieving high utilization rates. Others operate on a virtual
“skeet-shooting” range where business appears quickly and goes to the com-
petitor who can respond the fastest with the right resources. These companies
must continuously invest in a bench and in processes for identifying and re-
cruiting appropriate talent to be able to seize the moment.
In organizations where there is a need to respond quickly to f leeting cus-
tomer demands, use an enterprise scorecard to track performance indicators
on how staff resources are being consumed and what the firm need is for var-
ious skill sets. (More information on the automation tools that enable you to
effectively track this are covered in the next section of this chapter.) “By set-
ting up a dashboard of key indicators, you will be able to effectively use his-
torical activity to project your future skill needs and determine how much of
a bench you should be financing,” states Averbook.9
It is tempting for the firm to load benched staff up with work. In many or-
ganizations, it is not unusual to find bench resources buzzing about busily as
if they were on a client engagement. Gunn warns against this because it cre-
ates a false sense of productivity. He advises that organizations avoid using
benched billable resources for nonbillable work. “Hire them for a specific
piece of business with a specific time-table in mind. Let them work on other
304 Services Delivery: Taking Care of Business

things that will provide some value to the firm while they are waiting for the
billable assignment, but don™t load them up on this stuff or let them stay be-
yond the time-table in these non-billable roles,” states Gunn.10
One way to get value out of billable resources while they are on the bench
is to have them work on unsolicited business proposals and responses to re-
quest for proposals (RFPs). This is especially valuable if the proposal they
are working on is for the client where they will be assigned to work, since
this also provides them with information that can serve as an orientation to
the client and the details of the engagement. Furthermore, such an approach
begins to train junior staff in sales, a skill that becomes more valuable to
them as they progress in their career with the firm.
Another useful way to employ bench time is to use it to train and develop
resources. If possible, use bench time to either provide formal training or
give the benched resource an opportunity to shadow (follow and observe)
others as a means of learning new skills and techniques. (Chapter 10 covers
the topic of training and professional development in detail.) Sustaining
overall firm utilization rates should always be the primary consideration,
and resources should not be allowed to “hide” on the bench for lengthy pe-
riods. Benched staff should be assigned to their intended billable engage-
ment as soon as possible.
In summary, the bench size must be established based on the needs of
your business. The firm must then manage using activity indicators, and ad-
just as needed. Engage billable resources in productive work or development
opportunities when they are on the bench, but don™t lose sight of the original
reason for which you hired them.
Having gone through the effort of a staff need assessment, resource inven-
tory determination, productivity goal setting, and bench sizing, firm man-
agement should now turn their attention to planning how they will maintain
and improve this resource pool. An important factor here is installing an ef-
fective resource pool performance ranking and management system. Chap-
ter 10 covers the topic of employee appraisals and performance management
in detail; an abbreviated example of this topic is offered here.

Implement Employee Pool Performance
Ranking and Management System
Installing an employee pool ranking system is one of the most critical things
that must be accomplished to effectively grow the quality of your resource
pool. One possible process for establishing a resource pool ranking system is
as follows:

1. Develop an individual performance appraisal system that provides
each individual employee and you at a minimum with the following:
Resource Management

”Performance feedback against indicators/metrics that are relevant
to the quality and timeliness of work performance in the industry
and for the level of professional staff.
”Identification of performance inhibitors.
”Clarification of job result expectations for the coming period before
the next review.
”Training and development needs.
Make assessment of performance and needs as objective as possible.
2. Develop a ranking system that enables comparison of the perfor-
mance and potential of all the resources in each pool. For example,
the firm might use a spreadsheet, listing each employee with columns
that enable you to display how they are evaluated across a number of
3. Once individual performance appraisals are completed for each mem-
ber of a resource pool, performance relative to other members of their
pool should be compared across several key dimensions using the re-
source pool-ranking tool.
4. Reward and further invest in the development of the top 20 percent
5. Take action to drive the 70 percent in the middle toward a higher level
of performance.
6. Take corrective action on the bottom 10 percent. Place them on a
time-limited performance plan if appropriate and /or dismiss them and
replace them with higher caliber people with the potential to be in the
top 10 percent.
7. Based on the organization and the state of the resource pool, go
through this individual performance appraisal and ranking process no
more than quarterly and no less than annually.

Exhibit 13.10 is an example of a possible resource pool ranking chart. Suc-
cessful resource management is a key to firm profitability. However, to do so
requires immense amounts of data and (nonbillable) time. As firms grow, the
level of effort and complexity required to accomplish these tasks increases ex-
ponentially. To handle the increased demand on time, firms must at some
point in their growth automate portions of the administrative effort.

Resource Administration Automation
As a professional services firm grows in size and complexity, executives and
managers face the daunting task of managing to the optimal levels of uti-
lization across multiple projects and multiple skill sets. The complexity of a

F. Clementi 5 4 5 4 4.5 Top 20 percent performers
P. Chan 5 5 4 4 4.5

M. Doe 4 4 4 4 4 Middle 70 percent performers

L. Sanchez 4 3 4 4 3.75

M. Ried 4 4 3 4 3.75

B. Miller 4 4 4 3 3.75

T. Perry 4 4 3 4 3.75

P. Rogers 4 3 4 4 3.75

C. Dowd 3 3 4 3 3.25

J. Smith 3 2 3 2 2.5 Bottom 10 percent performer
1 to 5 = Poor to Excellent
Top 20 percent
Based on individual customer satisfaction ratings.
Based on timely project completion records.
Based on HR attendance records where 5 or excellent means never absent during the period, 4 equals 2 absences or less, 3 equals between 3 and 4 absences, 2
equals 5 absences and 5 equals in excess of five absences.
The product of the review rating, quality rating, productive output and attendance column divided by the number of columns (4)
Note: You may set up your pool ranking system in any way that suits your business as long as the results are as objective as possible, free of subjective bias
and legally defensible. Consult your HR advisor and attorney before instituting this type of practice.

Exhibit 13.10 Resource Pool Ranking Chart
Resource Management

professional services organization is affected by a number of factors, making
it difficult to estimate precisely at what size automation will become an ap-
propriate option. Therefore, the firm must judge for itself whether the cur-
rent administration justifies an investment of capital for labor. Here are just
three of the many factors that can create complexity:11

1. Number of skill types needed and provided. (A technology company
with 50 people that offers help desk, desk-side support, network sup-
port, application development, and acquisition management is more
complex than a technology company of 75 people that offers only one
of the preceding services.)
2. Variety of project contract length.
3. Variety of client types (e.g., financial services, pharmaceuticals,

To get an idea of how these factors might impact an organization, consider
the example of a small IT consulting company specializing in help desk sup-
port for small financial services companies has a one-year renewable con-
tract relationship. Now the firm adds two more client verticals, two more
types of contract terms, and two more service offerings. They have pro-
gressed from offering one type of service to one client for a specific period
of time to a model where they are selling more than nine possible offering
combinations. Add to this a little growth in staff, and the situation can
quickly spiral out of manageable control.
Not staying on top of all resource management and business activities can
spell doom for the professional services firm. In one instance, a money-losing
consulting division was further wrecked by increasing complexity. The firm
found that 50 percent of the billable consultants were engaged in nonbillable
and under-the-radar back office projects.
An inventory of activities in which underutilized, otherwise billable re-
sources generally engage when they are off a billable project and below any
radar follows:

• Monitoring processes that could be cheaply automated, thus removing
the need for monitoring
• Doing research for other team members who are not fully utilized
• Running reports of questionable value that few, if any, ever read (this
one is a favorite)
• Conducting internally focused surveys and queries that do not lead any-
• Working on low-return/questionable return in-house projects
308 Services Delivery: Taking Care of Business

In many cases, these resources feel vulnerable and will not come to man-
agers asking for more billable work. In other cases, they lack only one or two
vital skills that would make them suitable for any of the current billable proj-
ects. Again, however, feeling vulnerable, they are unlikely to bring this to the
attention of their manager voluntarily. The solution to this situation is for
managers to maintain and manage according to a global view of the various
activities within their organizations.
To help managers address this challenge, many organizations turn to soft-
ware solutions, which substitute systems and capital for labor and are appro-
priate for mid-to-large sized firms. Enterprise service automation (ESA)
solutions, as this family of application software is called, brings to service or-
ganizations benefits similar to those that enterprise resource planning (ERP)
tools give to the manufacturing and distribution industries. Software tools
can help professional services organizations to better manage things such as
planning, scheduling, managing billable resource utilization across multiple
projects, salesforce coordination, customer relationship management, perfor-
mance management, and communications. In addition, some software tools
can automate the processes of collecting professional staff billing information
and carry it all the way through the generation of billing and invoicing clients.

ESA Options
Because the professional service firm market is so large, it is not surprising
that more than 30 software vendors, including major players such as Icarian,
PeopleSoft, and SAP, as well as a number of newcomers, including Augeo
Software, ChangePoint Corp., Opus360 Corp., and PlanView, now offer soft-
ware tools to the professional services industry. These tools vary in their ca-
pabilities. Some are able to handle end-to-end operations, while others focus
on specific segments such as resource management across projects.
A number of professional services organizations will, from time to time,
opt to build their own software tools. A number of these custom application
are used by firms to automate timecard information collection, billing and
utilization, and other important processes. While these tools tend to have a
good fit to the business because they have been specifically built for the
firm, they can often have a less than stellar performance over the long-haul
because they are expensive to maintain, and lack the scalability to effec-
tively evolve with the needs of a growing business. The bottom line is that
companies that opt to build tools for themselves often end up paying many
hidden and unforeseen costs in the form of operational expenses, mainte-
nance expenses, and, ultimately, the expense of rebuilding to keep up with
the growth and evolving requirements of their business.
Averbook is quick to point out that, on the other hand, companies that buy
from vendors such as his firm, PeopleSoft, are avoiding these hassles and get-
ting more than just task automation. “In addition to automation, buyers are
Resource Management

getting the benefit of the best practices captured in the software solution,”
states Averbook.12 He also points out that due to their ability to leverage
their cost across multiple clients, operations and maintenance expenses
passed on to the client through the pricing models are lower than they would
be if directly managed and paid by the client.


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